The principal objection to insurance effected by a single payment, at any rate among the poorer classes, is apparent. It is not that they can make better use of their money; as a security against an early death or reduced circumstances no better investment could be found for a working man who is in possession of a sufficient sum with no pressing need for it. The real difficulty is the one of keeping his savings until they amount to a sum sufficient for any object of this kind. Here, however, the institution of Post Office Savings Banks may be of service; and this has not been lost sight of by the authorities, who offer them as a medium for the collection and keeping of such fugitive sums as may be most easily spared with a view to taking a Life Insurance premium. Thus, all a workman has to do is to put his savings into the Post Office Banks in such amounts and at such times as will best suit him; and when he has saved a sufficient sum for the purpose, the Postmaster-General will direct that the transfer of the amount shall be made from the Bank to the Insurance Office without the necessity of the depositor seeing the money. Of the general plan of paying the premium in one sum we cannot speak too highly. Those whose wages or salaries are not fixed and regular, or those who are liable to be thrown out of work—and few are not—could not do better than employ their savings in securing such a provision; and the younger the better, seeing how young and old are alike taken in the grip of the Destroyer. Not the least of the advantages following from this kind of insurance are the absolute freedom from all risk of lapses, from either carelessness or more serious causes, and the fact that the policies on this principle will have the highest surrender value.
Should the person wishing to insure not like, or liking not be able, to take out a policy after this fashion, he may choose one of several other methods. If he thinks he can more conveniently pay a small premium every year, he is at liberty to do this in different ways. If at thirty years of age he will pay a pound a year, he may secure for his friends forty-three pounds at his death; if he prefers to pay two shillings a month, he will secure forty-six pounds; and for an annual payment of two pounds six and sevenpence, he may secure payment of 100l. to his nearest relatives, immediately on proof of death. Again, if a person thinks, as many do think, that his payments should cease at a certain age, he may insure on that principle. Commencing at thirty years of age, and paying two pounds thirteen and tenpence a year till he is sixty, he may secure 100l.; by paying two shillings a month, between the ages of thirty and sixty, he may effect an insurance of forty pounds at death. It will be understood that these are only a few specimens of the working of these Tables, given more especially to show the characteristic features of the plan. By consulting the Tables themselves, any person may plainly see how it will affect him to insure by any of the above methods; and he may calculate his payments either at the times we have given, or at other times, such as half-yearly, quarterly, fortnightly, or weekly, with great nicety.
We will only refer at any length to another very important provision made for the carrying out of this useful and important public measure. It has to do, as indeed almost all the provisions have, to a great extent, with the wants and necessities of working men, especially such as must pay their premiums by small and frequent instalments. Seeing that working men are proverbially slow to look the distant future in the face, we urge, in the strongest terms, the claims of the provision in question on the attention and study of all large employers of labour. In no way could masters better fulfil the heavy moral responsibilities under which they lie to the less educated portions of society whose energies they employ, than by co-operating with them in the way of advice and assistance, in such a plan as that which remains to be described. The arrangement in question has doubtless been suggested by a scheme which, for several years, has been in full and excellent working order in the Post Office itself. We think it was in 1859 that Mr. Scudamore of the Post Office devised a plan, which was approved by the then Postmaster-General, by means of which and the concurrence of a large number of first-class Insurance Companies a considerable number of Post Office employés were enabled to make suitable provision for their families. In connexion with this plan, substantial assistance was given, to those who took this rational and necessary step, out of the Void Money-order Account. Under the arrangements then made, the Insurance Companies give the required policies to any officer of the Post Office, without any direct or preliminary payment, looking to the Post Office authorities entirely for the collection of the premiums as they become due; the latter, on their part, deducting the payments at such times as are agreed upon from the regular salary or wages of the assured persons. Thousands of Post Office officials, from the highest to the lowest grades, have insured their lives on this principle; they are not only assisted to do so, but secured from all risk of default, while the deductions are so small as to be scarcely perceptible.[204] The success of the plan has led to its partial adoption by the proprietors of large private mercantile establishments, where it works well; and this again has doubtless led to the extension of the plan, by means of the Act and the machinery we are considering.
It is now perfectly easy for any of the other Government departments, for railway companies, merchants, manufacturers, and other large employers of labour, to make arrangements under the 32d clause of the Regulations, to do for their workmen (and we are at a loss to understand why this has not been done before) what the Post Office authorities have done for their servants. The clause to which we have alluded provides, that if boards of management or masters of workmen will undertake to collect the sums by means of deductions from the wages of their officers or servants, with a view to paying the premiums over to the officers of the Postmaster-General, then the latter shall, “if he think fit, make arrangements with the said employers for such purpose, and shall constitute the departments, offices, or places of business of such employers, offices for the receipt of proposals, and for the receipt of premiums and instalments; and shall pay to such employers such remuneration for the work done by them, or their officers or servants, as shall be agreed upon between him and them.”
Surely, with all such facilities, and with such inducements to the workman to make provision for those who are nearest and dearest to him,—this provision to be payable at once, on the security of the nation, when he is no longer able to contribute to their support,—little persuasion should be needed to make him do that which is now one of the first duties of a man who has a wife or family dependent upon his exertions. It is only too true that workmen and the less educated portions of the lower middle classes may be blinded and cajoled into believing that those institutions will serve their interests best which, depending upon all kinds of meretricious attractions, promise immediate benefits for little payment, but only end in disappointing, if not in swindling them. It seems to us, however, that those who, like the majority of large employers, have both the capacity and the opportunity for directing these classes aright, are not only warranted, but, in all fairness, are expected to attempt to do so.
We must now speak of the Regulations for the purchase of Government Annuities. It is well to make provision for our families after we have left them; it is no less wise to make some provision for old age, or for the misfortunes of life. Many a working man, taking the expression in its widest significance, sees little before him in the future but a life of hard, unyielding work. There is a time, however, after which bodily strength must rapidly fail, even supposing that nothing has occurred during his years of toil to break him down prematurely: many a hard worker lives on long after the grasshopper has become a burden, and is little cared for, it may be, if he has never cared for himself. Let philosophers inveigh as they will on the selfishness of such conduct, that man has acted wisely who, under some such circumstances, has taken care to relieve himself of thought and much anxiety by having something in the shape of an Annuity to look forward to in his declining years. “Most men, as old age comes on, find themselves every year less and less able to procure by their labour those comforts which every year become more and more necessary to them. A man, by paying small sums out of his earnings while he is strong and active and in full work, may purchase an Annuity to commence as old age comes on him, and which will take the place of his salary or wages when he can no longer earn a livelihood.” In these words the Postmaster-General introduces his new Annuities' scheme, and offers to sell these Annuities through his department to any one who will comply with the Regulations.
The commencement of an Annuity transaction must be exactly similar to that described in connexion with an Insurance. After obtaining a form of application, the person must reply to the questions which it is deemed necessary to ask, and then return the paper to the Post Office for transmission to the Postmaster-General. For obvious reasons, he will not be required to say anything about his health, nor to pass any medical examination. The Government must take care, in insuring a person, that he is in good health; on buying an Annuity, the person himself should take care that he is not in bad health, or otherwise he might rush into a bad bargain. Almost the only preliminaries gone through in the case of Annuities are, a satisfactory proof of age, and answers necessary to identification. If the authorities in London are satisfied with the answers and the references given, a policy or contract is entered into by the Post Office on behalf of the Commissioners of the National Debt, setting forth, that, in consideration of certain payments made at certain periods, the payment of a certain sum is guaranteed to him as an Annuity on the security of Government.
As in the case of Insurances, the person seeking to purchase an Annuity has the choice of several kinds of annuity, and of annuities of any amount up to 50l. a year. He may purchase an Immediate Annuity, though in this case the purchase-money must always be paid in one sum. Thus, if he be twenty years of age and will pay down the sum of 198l. 3s. 4d., he can begin to receive an Annuity of ten pounds a year for life, however long that life may extend. Women, we must add, seeing that they are usually longer livers than men, must pay more than men. He may purchase also a Deferred Annuity; that is, an annuity payable after a given term of years from the commencement of the purchase. This Deferred Annuity may either be purchased in one sum, or by a yearly payment over that given term. If the former, it may be for any amount between one pound and fifty pounds per annum, to begin at a certain period; in the latter case, the amount may range between four pounds and fifty pounds, to begin immediately after he has completed his payments. Deferred Annuities may also be purchased gradually, or on the same cumulative principle spoken of in connexion with Assurances, and just according as a person finds himself able to spare the money; or they may be purchased by annual payments in the same manner, beginning on a small annuity, and increasing it from time to time as he finds himself able to increase his annual payments. Once more, by making payments half-yearly, quarterly, monthly, fortnightly, or weekly, during a certain number of years, he may purchase a monthly allowance of any amount from four shillings to four pounds a month, immediately after that term of years.
The first Tables which were ready in time for the operations for the purchase of Deferred Annuities were those known as the “Non-returnable Tables,” under which money paid was not returnable in the event of premature death, but “altogether sunk and lost.” Soon afterwards, however, the “Returnable Tables,” which had been under preparation from the first, were brought out. Now, therefore, if the annuitant chooses, he may purchase a Deferred Annuity with the proviso, that if death occurs before he should have reaped any benefit all the premiums shall be returned to his representatives; and also, that, at any time during his life before his Annuity is due, he may have his payments returned to him, subject of course to some deductions should he choose to close his account.
In all the above cases it is difficult to explain the method of working without giving examples; but the interested reader may receive, as he will doubtless seek, every information from the popular Abstract which will be presented to him free, on application, and from the Official Tables which may be seen at any Post Office. It only remains to add, as regards the payment of Annuities or Monthly Allowances, that they will be made half-yearly or monthly, as the case may be, at any of the offices opened for this business, i.e. eventually every Money Order Office; and that if a person be prevented by age, infirmity, or illness, from going to a Post Office to receive this allowance, it will be taken to him by an officer of the department.