The Sun.
London, England, 1844-05-10 00:00:00

FIFTH ANNUAL REPORT.

The Directors have again the pleasure of meeting the Pro-
prietors at the recurrence of the annual general meeting of
the Society.

They feel much gratification in stating that the business of
the Society has been considerably increased. The late gene-
ral depression, so unfavourable to the progress of life assur-
ance, appears to be gradually disappearing, although during
its continuance, and the severe trial which every species of
national industry sustained, the Society had made satisfac-
tory progress, having, since 1840, more than doubled its
business.

It may with truth be said that every institution in the
nature of life assurance, whose progress or success depends
upon the surplus income of society, becomes affected in pro-
portion as this surplus increases or diminishes—the sums that
are annually applied to life assurance being those which re-
main to each individual after his ordinary wants are satisfied.
It so happens, however, as the experience of the Society has
proved in a great many instances during the past years, that
however equalised the surplus income of individuals may be
in a.series of years as applicable to life assurance, yet in suc-
ceeding years, during a severe pressure, there is often a de-
ficiency in their annual resources.

It is to this point, as peculiar to the working of the Society,
that the Directors would wish to call the attention of the
Proprietors. The loan fund system, as engrafted on the
Society, has now been long enough in operation to enable the
Directors to pronounce an opinion in favour of its utility. It
is peculiarly applicable during periods of embarrassment and
pressure, which, unhappily, too frequently occur in this
country. By the operation of this principle, the Proprietors
are aware each policy holder assured for life has a right to
borrow two-thirds of his premium ; and very many instances
have come within the knowledge of the Directors, wherein
the effectual aid afforded to the policy holder, has enabled
him to sustain his policy, and to carry out his original inten-
tion of providing for his family.

In other numerous cases, equally within the observation of
the Directors, the sum which the assured had been enabled to
borrow has saved him from pressing temporary embarrasment,
or enabled him without injury to his policy to make a profitable
application of it. It has in fact afforded him all the chances
and security of a life assurance, and the use of two-thirds of
his capital at the same time.

To illustrate this, let an instance be taken of a policy
holder of six years' standing, whose premium amounts to
1001. a year, at the present moment having paid 6001., he
would be entitled to borrow from the Society the sum of
4001., while, at whatever period his death might occur, his
representatives would be entitled, deducting the amount bor-
rowed (supposing his age at entering 31, and his policy
4,0001.), to the sum for which his life was assured.
The importance of this principle the Directors believe
cannot be too highly appreciated by the public, as they
feel assured that, combined with other equally liberal advan-
tages offered by the Society, it is sufficient to obtain a pre-
ference from assurers who act upon the dictates of their own
judgment, unbiassed by private solicitation of interested
parties.

The loan fund on the transactions to the end of the year
has been acted on to the extent of 16,9011. Bs. 9d.

Another peculiar feature of the Society to which the atten-
tion of the Proprietors is called, is its plan of deferred annuities ;
from their first promulgation they have attracted considerable
attention—they are at once a corrective both of the errors
peculiar to the system, and glaring abuses in the administra-
tion of benefit societies. It is not alone, however, by the in-
dustrious classes, for whom they were originally designed,
that this system may be turned to advantage. The wealthier
classes will find in the combinations of this plan, all the ele-
ments of a safe and profitable investment of capital. The
system includes the advantages of a tontine or survivor-
ship, where the party attaining the age required becomes
entitled not only to the share he has contributed at
compound interest, but to the capital and accumulations of
those who have failed to reach the stipulated age, while the
plan is so constructed that the loss to the representatives of
the latter is but trifling, as two-thirds of the premiums paid
are returned after death. This investment will be found
eligible on the lives of, and as a provision for, young people,
and on all ages from one to forty five. One example will be
sufficient to show the profit derivable from the application
of 100/. a-year at the age of thirty, for the pur-
chase of a deferred annuity or the option of other
benefits at the age of 65. The party so making the in-
vestment would be entitled to the option of an annuity, dur-
ing life, of 1,030/. 6s. ; a sum on attaining that age of
8,5001. Bs. ; or a sum at death of 10,039/. 12s.
Although the actual mortality amongst the assured has
not been equal to that expected, the policies that have be-
come claims on the Society, have amounted in the last four
years to 24,6681. 18s., and of this sum 10,720/. has arisen
in the last year—an amount greatly exceeding the
average experience of the Society, either previous
to or since December last. The actual mortality
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The Directors, in conformity with the deed of settlement,
have caused the annual investigation into the affairs of the
Society to be made up to December, 1843 ; and the result,
together with the accounts of the auditors, are presented, and
will be read to the meetieg. The result of this investigation
exhibits the business of the Society in a prospering con-
dition.

The reserved profit above liabilities being 29,380/. ss. 3d' •
one-fifth of this will immediately enter into the present dis-
tribution, and in the proportion stipulated in the deed. This
SUM will enable the Directors, after making a reserve of
1,674/. 13s. 6d. towards the extinction of expenses incurred
in the formation of the Society, to recommend to the meeting
the declaration of a bonus on all policies on which five pay-
ments have been made ; namely, those of 1837, 1838, and
1839, and of a dividend on the guarantee capital of the
Shareholders on the year, including interest and bonus of 7i
per cent., besides reserving 23,504/. 4s. 3d. for future bonuses
to the policy holders.
The present bonus to the policy holder is, on the average,
equal to 60 per cent. on the annual premiums, as a rever-
sionary addition to the policy, 16 2-3 per cent. in present
cash, or, on the average, 2 per cent. in permanent annual
reduction on future premiums.
To more clearly point out the accumulating advantages to
policy holders, a few examples are given, taken from the
tables prepares by the Actuary :