Settlement Policies. — This class of policy is issued under the Married Women's Property Act (1882), whereby a trust can be created for the benefit of a wife or children of an insured person, the trustee being the Insurance Com- pany. The advantage of this is that such a policy does not constitute a part of the husband's estate or become subject to his debts, either whilst living or at his death, so that in the latter event the money is paid to the widow or children direct for their own use. A policy of this kind, if necessity should arise, could also be exchanged for a non-forfeitable policy in the manner before pointed out.
Endowments for Children. — A parent, by paying a premium of about £5 5s. annually, can secure to a child aged six a sum of £100, on its attain- ing the age of twenty-one. Should the child die before reaching that age, the money paid in pre- miums is not lost, for it is all returned to the parent without deduction.
By this means a marriage portion or outfit for a girl, or a start in business for a boy can be provided to any amount that may be desired.
Insurance on Joint Lives is another mode of insurance, very useful in particular cases. For example: a mother aged fifty has an income, for her life and no longer, of £300 a year, and she has a daughter aged twenty, who has no means of her own, present or prospective, being entirely dependent on her mother. The joint lives are insured for, say, £2,000, which would cost in premium £100 a year; the insurance money to be paid at the death of the first of the two. If the daughter died first the mother would get back, by the insurance money, possibly more than she had paid in premiums. If the mother died first, say at the age of seventy, by that time the daughter would have attained the age of forty, and the £2,000 would be paid to her. With the money she might, if she so pleased, buy an annuity for life of £110 a year.
Insurance on the Longest of Two Lives, payable on the death of the survivor, is useful in cases where land or house property is held on lease, so that there may be no pecuniary loss when the lease expires. The rate of premium is in this case naturally less than where the insurance is to be paid on the earlier of the two deaths.
SURRENDERS.
If from any cause it is desired to give up a policy and discontinue paying any more pre- miums, the offices will pay to the insured what is called the surrender value of the policy, at the same time cancelling it and all its conditions. This surrender value may be roughly calculated at about 40 per cent. of the premiums paid, in a case were bonuses have been added to a policy, and about 33 per cent. of the premiums paid in a case where the bonuses have not been so applied. For example: a person has paid £25 a year in premiums for ten years — in all £250 — on a policy for £1,000, to which has been added £60 in the shape of bonuses. The surrender value in such a case would be £100. But if the insured had taken his bonuses in cash, or his policy did not carry profits, then the surrender value would be £82 10s. only.
Any insurance office will lend the insured, on the security of the policy, an amount of money not exceeding the surrender value, and the rate of interest is usually moderate.
In this case there would be no necessity to abandon the policy, which would be kept alive and increased by added bonuses as before.