It is a matter of great importance to be insured in a good office, and the most careful inquiry should be made on the subject before taking out a policy. “Safety,” says one writer, “ought to be the first consideration, and economy the second; but really, economy ought to be put first, for there is no economy in insuring in an unsound office, however low its premium may be.”
Life insurances on a small scale can be effected better, perhaps, through the Post Office than through any other channel. The Postmaster-General is authorised by an Act of Parliament to insure the lives of persons of either sex. The lives of children under eight years of age cannot be insured; from eight to fourteen they can be insured for not more than £5; and from fourteen to sixty-five they can be insured for any amount not less than £5 or more than £100. The security for the payment of the money at the proper time is the best in the world.
Forms of proposal for the insurance of lives are to be obtained at any Post Office Savings Bank, and anyone can see there the tables of the premiums to be charged, and obtain all other necessary particulars. As examples of the various ways in which insurance through the Post Office can be effected, take the following:—The life of a girl between fifteen and sixteen years old may be insured for £10 by an annual payment through life of 3s. 10d., or by an annual payment to the age of sixty of 4s., or by a single payment of £3 17s. Or she can assure £10 at the age of sixty years, after the payment of the final premium, or at death, should death occur before that age, by an annual payment of 4s. 6d., or by a single payment of £4 7s.
There are some companies which insure lives by the payment of a small sum weekly or fortnightly, a collector calling for the payments when they become due. This is a dear system; no more profitable than the purchase of tea half an ounce at a time. In these days of savings banks it is no excuse that it suits scantily filled purses. Instead of adopting it, it would be far better for their own interest if people of small means would lodge the sums they would otherwise have paid the collector in the Post Office Savings Bank, and at the end of the year direct that the amount be applied to the payment of an insurance premium.
Besides the two forms we have mentioned there are other varieties of insurance. You can insure plate glass against breakage, boilers against bursting, and crops against hailstorms. The lives of horses and cattle can be insured, and pig insurance companies are not unknown.
Insurance against accidents is another useful variety. It dates back from 1849, when a company was started to insure against the consequences of railway accidents. In return for a payment of 3d., 2d. or 1d. made by first, second, or third class passengers respectively, for insurance during a single journey, it undertook to pay £1,000, £500 or £200 in case of death by such an accident, or a certain weekly allowance in respect of personal injury not resulting in death. A few years later the business was extended, and people can now insure against accidents of all kinds by a yearly payment proportioned to the degree of risk supposed to attach to various occupations or other conditions of life.
There is another kind of insurance worth knowing about: Fidelity Guarantee Insurance, it is called. By means of it employers are guaranteed against the dishonesty or insolvency of their servants. Previously, people in positions of trust often got others to be surety for them, but the system of private suretyship led to many hardships. Solomon was right, and let all wise girls take note of it: “He that is surety for a stranger shall smart for it; and he that hateth suretyship is sure.” The guarantee of a company, given as a pure matter of business, and for an annual payment, is now generally preferred. Of course, before giving a guarantee the company makes very particular inquiry regarding the character of the person and the checks to be used by the employer. Some companies insure only against embezzlement, whilst others protect the employer against any failure to make good the sums entrusted to the employé. The premiums to be paid annually range from 10s. to 60s. per cent. of the sum guaranteed.
Annuities are our next subject. An annuity is a periodical payment made either for a fixed number of years or whilst a given life lasts. It may be paid yearly, quarterly, weekly, or otherwise. It may come to one as a gift, or be left as a legacy, but it can also be purchased through an insurance company by the payment of a certain sum of money supposed to be its equivalent in value. Annuities bought in this way may be either immediate—that is to say, the payment of them beginning at once—or deferred; in other words, the enjoyment of them postponed till after a certain number of years have elapsed. If, say, £100 is to be received each year by anyone, he or she is said to have “an annuity of £100.”
For young people, with all the chances of life before them, the purchase of an annuity is seldom wise. The sum, observe, sunk in this way can never be had back again, even though an opportunity should occur for making a much more profitable use of it. But when people grow up, it is often the best way to make the most of a small capital, and to prevent their becoming, perhaps, a little later in life, a burden on their friends. The great thing, in settling whether to invest money thus, is to discuss the matter with common sense, and to ask, “What should I do, so as to be most useful to myself and to others?”
Annuities, both immediate and deferred, are granted by the Post Office for any amount not less than £1 or more than £100 to any person not under the age of five years. Forms of proposal for purchasing them are to be had at any Post Office Savings Bank. The sum charged varies with the age and sex of the person on whose life the annuity is to depend, and, in the case of deferred annuities, with the number of years which are to elapse before the commencement of the annuity.