The Sun.
London, England, 1842-07-04 00:00:00

LIFE INSURANCE.

The importance of life insurance, and the interest
created by the remarks which appeared in our May
number, induce us to recur to the subject. We then
pointed out theithprovements which have lately been
introduced into the practice of insurance, rendering
it less exclusive, and better adapted to the various
purposes and interests which have grown out of an
improved state of civilization and an enlarged sphere
of business transactions. We showed that persons
labouring under known complaints, and persons going
to different parts of the world might, contrary to the old
practice, be subjects of British assurance ; that means
had been discovered whereby a creditor might obtain
a policy which could not be endangered by the acts
of the debtor, and that there was one Life Company,
the London, Edinburgh, and Dublin, whose policies
..'ere rendered indisputLle.by their deed of constitu-
lon. 11re were necessa23.ly led to, the conclusion,
chat these improvements were not only highly proper,
mt that the assured were not placed in a fair and
equitable position in transacting business with Life
Companies who refused to adopt those improvements.
As intimately connected with and vitally affecting
money transaction policies, and all assurances which
may come to be the subjects of transfer for value, the
question how far a party has acquired a legal interest
in, or a right to a policy, is a matter of deep im-
portance. It is proper and salutary that persons should
not be permitted to speculate and gamble upon the
lives of others and that no one should be permitted
to obtain a policy upon a life of a person in whose
existence he has no pecuniary interest. This gave rise
to the Act 14 George 111., ch. 48, an Act in force in
England and Scotland, but net in Ireland, which was
introduced for the purpose of preventing " a mis-
chievous kind of gambling," by making insurances on
lives or other events wherein the assured has no in-
terest. A very enlarged and different construction
has been put upon this statute. Courts of law have
ruled, that although the persons on whose life the
policy was granted was indebted to the assured in
the full sum contained in the policy, and although the
assured shall have regularly paid the premium for a
long series of years, yet he shall have no claim against
the assurers except for the precise amount of the sum
which may be due to him by the original debtor
when the claim comes to be made against the Com-
pany ; that if the whole, or any part of the debt, shall
have been liquidated during the currency of the po-
licy, the assuring Company shall have the advantage
of that, and be entitled to a total discharge, or a de-
duction of a like amount from the claim against them.
The question betwixt the assurers and the assured is,
therefore, not whether the policy was fairly obtained
for the security of a sum truly due when the policy
was granted, but what, after an accounting between
the executors of the deceased and the assured, is the
amount of the claim of the latter. There is no doubt
about this being the law of the case, it having been
erequently so decided. In the case of " Godsoll against
Bolder(); these views, so unjust to the assured, were
carried out to their fullest extent. An assurance had
seen effected upon the life of the celebrated Mr. Pitt
to cover a debt. The assuring Company, in considera-
tion of the premiums, became bound to pay the sum
'assured within three months after the death of Mr.
Pitt should have been duly certified to them. The,
plaintiffs, who were the assured, averred that at the
time of making the assurance, and from thence until
the death of Mr. Pitt, they were interested in his life
o the amount of the sum assured, and that they dilly
paid the premium. • These averments were not denied;
but the plaintiffs having "received payment of , their
*.lebt,'after Mr;Pitt's death, -from his executors, the
Company contended that, in terms of the statute
before referred to,' they. were released from their obli-
;ation to pay. Here, it will be observed, the interest
was not only originally fair and complete, but that it
continued until after the death of Mr. Pitt,. which was
the event insured. Lord Ellenborough decided the
case in favour of the Company. We cannot dispute
' that this is law ; but it was obviously not a just orl
Nuitable settlement of the question between the as-
sured and the assurers. The Company do not calcu-
late their premiums upon the chance of the ultimate
solvency of the person whose life is assured. They
charge and receive payment, in the shape of pre-
Aums, for payrrient of the total sum in the policy ;
the probability of life is their ground of calculation,
and having been paid according to that calculation, is
there any justice in permitting thera_to get rid of
their obligation on the ground that another party is
able and may be forced to pay the debt ?
The injustice which may be done under the sanc-
tion of this statute, which appears to have been framed
for a totally different purpose, is so great, that Direc-
tors of Life Companies may be induced verbally to
state that their Company would not avail themselves
If it. This, however, is not a sufficient protection to
' he public. Life Companies may not consider it to
oe for their interest at present to take advantage of
what is so manifestly unjust, or they may, and cases
'lave occurred where they did, plead the statute upon
he pretext that the assurance was in other respects
hillsy ; but as they could not succeed in making that
appear, except to themselves, they pleaded want of in-
erest in the assured, and thus obtained what they
considered justice by means of an unjust defence.
• Policies on the lives of others are the daily subjects
if sale, and an inquiry as to the continuance of the
Of which they were
Life Companies
conduct.
. ) reffected,igi n 1 diesbts,elfdoormtheentesreecdurittl?:on
; which shows the
Companies have
We
extent of ob fy ctobnefiirdefanicre
anti
.whichhono:fu,irf
nave pleasure, hoVveve , r in referring to a Life f
14th Com-
,:)any, the only one known to us, who openly and
expressly repudiates the Act
_o George the
Third. We quote from the London, Edinburgh, and
Dublin Life Company's prospectus :—" The ordinary
rule is, that if a. creditor be paid his debt before the
the benefit o
policy' becomes a claim, he loses _
become
his
policy, and the premiums which he has paid come
forfeited to the office. This Company repudiates all

such unfair advantages." The interest of the public
requires that all Companies should adopt the same
rule, and that, they should palish it in order that they
may be bound to follow A.—Polytechnic Journal.