Assurance who visit provincial towns and villages, and placard the walls with their announcements; but it is soon discovered that these gentlemen are the agents, or paid advocates, of particular societies or offices, a discovery which naturally rather weakens their hold upon the public, and destroys their claim to pure benevolence in the proclamation of their knowledge.

Such are a few of the more obvious ways of accounting for the prevailing ignorance. It is our present intention to endeavour, within moderate limits, so to expound the principles and practices of Life Assurance against death and personal incapacity, that our readers may gain a vantage ground from which they may, at any time, scrutinize more effectively any particular project or proposal laid before them for the purpose of obtaining their patronage and personal connection with it. In so doing we shall employ the plainest language, and avoid all technicalities which can be avoided, while we shall explain the few we are compelled to employ. Our aim will also be, not so much to explain what is already explained in one or two tracts or tractates upon the subject, as to unfold what is not usually explained, and to give our readers the fruits of a good deal of research and inquiry which they will not easily find elsewhere ready to their hands. We shall rather place them in a position to judge for themselves, and to follow their own conclusions, than enlarge upon themes and schemes in a manner better suited to a special pleader than an instructor. Nor is it an unimportant point that the writer is unconnected with any Office or Society, and that he therefore speaks without any bias to particular persons or plans, and purely with a view to the information and interest of his readers.

First, and principally, with reference to Life Assurance-a Company established for the purpose of assuring lives, proposes to convert a physical uncertainty into a pecuniary certainty. Proverbially, one of the most uncertain events in the whole round of occurrences, is the time of any individual's death, but although the duration of one person's life is so uncertain, the duration of a considerable number of healthy individuals' lives can be reduced to an average of figures, which long experience has proved to be as fixed as any law of Nature. Not more assignable is the course of the sun and the orbits of the stars, than is the collective duration of human life in a large number of ordinarily healthy men and women. The great aim has been to arrive at the precise knowledge of the duration of Assurance life collectively, and not to conjecture it loosely and vaguely-as for many years even professional men were compelled to do; with this aim a true Rate of Mortality has been sought after by noting the births and deaths of a given number of persons in a town or district. From observations of this kind at Northampton and Carlisle arose the two well-known Mortality Tables, termed, respectively, the Northampton and Carlisle. The former, being earlier, was the table adopted by the earlier offices; the latter, which is the later, and far the truer, is the basis of most modern business. But, since its adoption still truer Tables have been formed, which are

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founded on the returns made to the Registrar-General, and these are called the English Life-Tables. Dr. Farr, attached to the Registrar'soffice, has carefully observed the Registration returns, and improved the Life-Tables; so that now we have really correct and reliable data of the expectation of human life from any given age up to death. We are so near the real mortality, that future knowledge will not probably materially interfere with practical results in Assurance business.

Let it be, then, distinctly understood that, although different offices have, from their dates of establishment, employed different Tables, simply because they could only take the best of their own day and date, yet, from the Tables we now have we can predict, with certainty, the duration of a sufficiently large number of lives to afford us an average. This last point is important; for, if the number be too small for an average, we tend towards the uncertainty of individual life; but, if the number be considerable, then whatever casualties happen (short of a raging pestilence, or an unforeseen calamity of an exterminating nature), the shorter lives of some will be compensated by the longer lives of others. Every person, upon admittance to an Assurance Company, undergoes a medical examination; and, upon his health being pronounced fair, he is enrolled amongst the assured; and the experience of every such office has shown that the mortality recorded has always been more or less within the limits of the tabular expectation. As the old Tabies, particularly the Northampton, were too imperfect for accurate results, the offices adopting them have had to make use of a counterpoise, by a special arrangement in the distribution of their surplus; and thus the evil has been compensated in some degree, though Lot altogether, because some gain what others have lost. For instance, the old Northampton Table (constructed about 1782) was the basis of the calculations of the great Equitable Society. As it represented human healthy life to be shorter than it really was and is, the rates charged upon that Table are too high; and, consequently, the Equitable Society have had a difference from the true rate, in its own favour, of from 55 to 26 per cent., according to the ages of the Assured; and its own more recently published experience of its own mortality proves that its charges have been too high by one-half at several ages, and by one-quarter at others. These differences of Tables and charges in the various Companies create difficulties of adjustment and valuation in the periodical investigations of the affairs of those Companies; but upon them we shall touch as little as may be at least, in this present Paper.

When we have obtained a true Table of Mortality, we have what may be said to correspond to the cost price, or producing price, et a shopkeeper's or manufacturer's goods. A Life-Assurance office will not assure lives upon this cost price, but upon such addition to it as will leave a margin for all expenses and contingencies, and a surpias after all deaths. Its directors and managers, therefore, have the tabular rates properly calculated for all ordinary business-a Te

of Mortality, which shows them, as it will show all, the net cost of the article in which they deal-viz., Assurances of human lives. They are sure, from general and infallible experience, that this net price will not greatly vary within any given period. A manufacturer can make cheaper at one time than another; the Life-Assurance Company never can, as the law of mortality seldom greatly alters. All that need be said on this point is, that human life has markedly improved within the last thirty years, owing probably to increased medical skill and advanced hygiene-or, the science of health. But life may now be regarded as a known and fixed quantity; and so also is its pecuniary value, which any man can ascertain for any age by an inspection of the Carlisle or English Life-Tables.

The net cost of assuring life is called the pure premium, and the gross charge made by a Life office is called the loaded premium, or, in plainer language, the gross or tabular premium-being that which stands opposite to each age in the Tables issued by the various offices. Now, the addition made to the pure premium, in order to constitute it the loaded premium, is usually from 25 to 30 per cent. No ordinary person, probably, will concern himself about the net or pure premium, that being held to be an office secret. Take an example: A man of thirty years of age next birthday would find the net cost, or pure premium, for assuring £100 at his death, to be £1 18s. 6d. per annum-that being the sum which actually represents the risk incurred by the Company every year in guaranteeing him £100 at death. But in the Tables of Premiums issued by the Companies there will be set opposite to age thirty, charges of from £2 13s. 5d. per annum to £2 5s. per annum, varying according to the particular office, its plans and its practice; yet in every office the cost to it is the same, whatever its charge may be. The expenses of conducting the business vary greatly in different offices, but not the actual prime cost of the business transacted. It will considerably facilitate the understanding of office procedure, if this truth. be borne in mind; and it may, therefore, be repeated that, so far as the mere net cost goes, no one office has any advantage over another. Equally certain, too, is it that every office must receive the premium intact every year, in order to meet the ultimate demand to be made at the payer's death; and, until that event takes place, it must put out these sums to the best interest. The charges are made upon this presumption. Multiply the number of such cases to any amount you please, and you have the simplest and purest forms of Life Assurance; which, in other words, is the careful preservation and continual improvement, at interest, of annual payments regularly made by the Assurer to the office.

Out of the addition made to the net premium or the actual cost, the office takes its expenses of conducting affairs; and from that addition also derives, if things be carefully managed, a considerable surplus, just as, in every-day trade, the shopkeeper or master lives out of his profit and lays by a surplus, if any be derivable from his business. It is, therefore, in all cases out of the margin that Life

Assurance offices and common tradespeople thrive. If in any instance a man spends more than his margin, he comes into di culties, and so also does a Life office, and the cause of failure in such an institution never can be a failure of the principles of the science; but either a prodigal expenditure, or a lack of business, the latter not being always disconnected from the former, since a com pany seeing its business decline, too frequently spends what ought to be reserved in the hope to procure more by advertising and canvassing. We could easily show how continuous a parallel might be drawn between the ordinary requisites of common commercial life and those of a Life-Assurance company in these respects. There has never yet been an instance of the insufficiency of the science of Life Assurance as now understood, or the failure of any office, merely in consequence of the incorrectness of the principles of the science. They may be considered as incontrovertible and infallible. If we could insure good conduct, as we can insure good lives, there would never be any cause of complaint. The principles of the business are mathematical, the conductors of it, alas! are mortal, not merely in the business sense of that word, but also in its moral acceptance.

It will now not be difficult to explain and understand what are meant by the so-called Profits of a Life office. Strictly speaking, there are no profits; this term being a misnomer as applied to a business, in which there is little or no ground for speculation, and in which events can be pretty accurately foretold upon the broad scale. As, however, various companies advertise their profits, and are compelled to retain an objectionable mode, surplus would be a better term, and deceive no one. Surplus or profit simply arises from the excess of charges which offices make over the net or cost price of assurance, and must be chiefly* derivable from the additions made at every age to the pure premiums. As there are mostly 25 or 30 per cent. more than is really necessary, out of these there will, in due time, accrue a considerable surplusage. This will not be to the amount of the whole additions to the pure premiums, because the expenses of the offices must also be paid out of that fund; bat in all cases where the business is judiciously and economically conducted, a surplus will accrue out of the whole additions to the pure premiums, less the expenses of the management, and it will form a reserve fund for the apportionment of bonuses or additions to policies -the term bonus being alike objectionable to the well-informed, and attractive to the ignorant. There cannot be a bonus where all consists of repayments of what has been overcharged-of returns of what the assured have paid in excess.

*We say chiefly, because we wish not to embarrass the statement with a multiplicity of details; but, if we were writing technically, we should particularize four or five sources of surplus, and especially, 1, the improvement of the premiu' is at a higher rate of interest than that assumed by the office as its basis. 2. The diminution of mortality amongst the Assured below the rate calculated up a according to the Table of Mortality adopted. These two sources are the princ pal ones which can now be relied upon to any extent.

These simple explanations, if rightly understood, will dispel a large amount of illusion as to the peculiar advantages of some puffing offices. One office cannot, in the very nature of its business, so greatly exceed another as to give much higher and equitably apportioned "bonuses" with safety and prosperity. They all deal in the same commodity-at the same cost price-and in the same public market. Differences of conduct, of zeal, prudence, and economy will, of course, create considerable differences in final results, but not so much amongst high and honourable offices as is commonly imagined. Investigation would soon show the unsoundness of certain advertised advantages in this or that office, but we have not space for more than a few sentences on this head.

In comparing any two Life offices, it may be found that one charges a higher premium at the first entrance than the other by (say) 10 or 15 per cent. Let the higher charging office be A, and the lower charging office B. Now A will have more of surplus to divide than B, because it has, every year, charged and received more money, and has put out that excess to interest. But the Assurer in B, though receiving a less addition to his policy of Assurance, has obtained the equivalent in his original saving by paying a lower premium every year. We have made numerous calculations, showing that such a present saving is equal to a deferred bonus, if such saving be put out to interest. Let the following tabular extract suffice:

COMPARISON OF PRESENT AND PROSPECTIVE ADVANTAGES OF A AND B OFFICES, IN ASSURANCES OF £1,000.

It is manifest, in the above tabular comparison, that a person wishing to assure at (say) age 30 for £1,000 at death, has the choice of a present and continued annual saving of £4 6s. 8d., or a deferred advantage called a bonus, according to his preference of B or A. Both he cannot have. The only question is, which will he forego? Nor can A be said to be a better office than B, merely because it gives larger additions to a policy. It charges more at first, and gives more at last. Thus the same charge which A makes at first will in B procure at first a larger assurance, that is, £1,209, instead of £1,000 in A. The above figures are founded upon the actual rates of two existing offices-B representing nearly the lowest charge of any office, and A the ordinary charge of most of the higher offices, though not the highest.