CHAPTER I.

INTRODUCTION.

AMONG the features that may be regarded as characteristic of modern Christian society, Life Insurance stands prominently forward as peculiarly unselfish. Its main object, provision for those whom death deprives of their bread-winner and protector, entails self-denial and forethought on the part of the individual who takes out a policy, and may thus become indirectly a boon to himself, by compelling thrift, and keeping alive the best feelings of our common humanity. The more the principles of Life Insurance are understood, the more certain are they to be appreciated and acted upon; and while they give to society a guarantee for the uprightness and honesty of the individual, he in return assists in rendering more firm and stable the very groundwork of the republic. That the subject is one deserving the attention of Governments has been proved by modern enactments, though it does not appear, from a return that lies before me, that the portion of the public for whom Post Office Insurances were specially intended, appreciates this offer of the

highest authorities.* Every insurer must desire that Government surveillance should be exercised closely over all private insurance companies, so as to give him and his heirs greater security that his confidence is well placed. It is simply impossible for any one but a professed actuary to analyse and thoroughly to understand the position of any given company; and, considering the helplessness of the individual insurer, and the misery that has, within the present generation, been entailed on thousands, by mismanaged companies, it is but reasonable to desire that the insurer should have a better guarantee for his laudable investment in any private company, than that offered by an array of figures which he cannot master, and which may prove more or less fallacious.

The relative number of inhabitants of different localities who have taken out policies of life insurance may not inappropriately be regarded as an index of the prosperity of the communities they belong to, for they afford direct evidence of the existence of those qualities, thrift, forethought and consideration for others, upon which our social comfort and happiness chiefly depend. Those qualities do not necessarily bear a direct ratio to the amount of ratable property possessed by these dif

The return referred to gives the following statistics of the Post Office Scheme of Life Assurance:

ferent communities, but they form the essential basis of Christian society.

But Life Insurance, like all human enterprises, requires to be carried on with care and caution. An abstract good may be capable of abuse, and so unfortunately life insurance has occasionally been turned to a bad account. Direct fraud has crept

in, of which instructive examples may be found in the literature of the subject;* but carelessness and a neglect of rules, that must guide all commercial transactions, have had more to do with the failure of insurance enterprises than attempts at deception, which are guarded against with comparative facility. Life insurance is essentially a commercial contract between two parties; the basis of which is, on the one hand, the truthful representation of certain data on the part of the insuree, and the undertaking on the part of the insurer to pay a covenanted sum of money, provided the former has duly fulfilled his part of the agreement, on the occurrence of certain contingencies. Now all insurance tables are calculated so as to allow a margin of profit to the companies, provided that the mortality does not exceed a certain ratio. An insurance company cannot conduct a safe business unless it is able to restrict its mortality within the rate provided, and to defray its expenses out of this margin allowed.

*The reader is specially referred to Annals, Anecdotes, and Legends, a Chronicle of Life Insurance, by John Francis: London, 1853; and The Insurance Guide and Handbook, by C. Walford: London, 1867. Second edition. The latter is a mine of valuable and trustworthy information, and we shall have frequent occasion to quote from it.