LIFE ASSURANCE, or life insurance as it is frequently though scarcely correctly termed, is the name applied generally to the system by which one person, society, or company, called the assurer, in consideration of a payment, called a premium, made to it by another person known as the assured, enters into a contract to pay an agreed sum of money to a party indicated in the con tract upon the death of the assured or perhaps some other specified person. Briefly, the assurer, in consideration of a premium, agrees to make a certain payment upon the death of a specified individual. This is the system described generally, but in practice there may be introduced various modifications, such for example as an agreement that if the subject of the assurance should attain a certain age, then, although the death contingency has not happened, the assurer will forthwith pay the agreed sum.
The history of life assurance, compared with that of marine insurance, is a quite recent one. The fifteenth and sixteenth centuries knew of a very general and commercially-sound practice of insurance against maritime loss. It was not, however, until the latter part of the eighteenth century that, with the establishment of the Equitable Society in 1762, there was any genuine attempt to place the practice of life assurance upon a sound basis. And even then the scientific means available, compared with those in hand at a much later period, were sadly inadequate. Fire insurance, also, is its senior by at least a century. But though life assurance is thus comparatively a branch of commercial enter prise of very late development, it is at least satisfactory to the Englishman to know that while the practice of marine insurance can only be considered as an importation from abroad, that of life assurance is his own creation, and has, until recently, developed entirely as a British institution. During the last fifty years, however, there has been a steady and most successful prbgress of life assurance on the European continent, in the United States, the British Colonies, and even in nearly all civilised countries ; and though British life assurance still shows most conspicuously, yet its younger rivals are pressing forvrard with distinct and increasing success. In fact, judging from comparative results, British life assurance is not nearly so extensive as it should be. In 1871 the population of the United Kinbriloin was 260 per square mile ; in 1901 it had risen to 340 per square mile. In the former year the amount of assurance, excluding "industrial," per head of the population was .£10, which increased in 1901 to £15, 10s. Od. ; and during the same period the annual premium paid per head of the population increased from 6s. 6d. to 10s. 6(1. These figures are
not by any means satisfactory if compared with those of the United Stades for example. Taking the years 1870 and 1900 it will be found that the population of the States increased per square mile from 13 to 26, while the amount of assurance per head increased from £10, 10s. Od. to £lti, and the annual premium from 9s. 6d. to 16s. 4d. l'hougli the country in the United States is more extensive, and the population more scattered and so less easy of aCCeSS by assurance agents, than is the case in the United Kingdom, yet it has been calculated that the assurance business of the United States has more than doubled during a period in which the British increase has been only 40 per cent. In fact in Australia, where the population is sparsest, the average amount of assurance per head is higher than in any other country—A is nearly L'20. In 1871 the United Kingdom had a total of .£320,000,000 of assurance in force, and in 1901 there was the sum of .£610,000,000 ; in the United States the year 1870 showed a total of X400,000,000, and the year 1900 one of .E.1400,000,000. And other countries also show a progress whieli is very startling when compared with that of Great 13ritain. 'Hie German Empire had a total sum of' X160,000,000 of assurance in force in 1885, and this increased to .£352,000,000 in the year 1898 and in the same period the total assurance of the Austro-Hungarian Empire increased from .£50,000,000 to X97,000,000. Nor is there any valid reason fi)r this slow progress of British assurance. There arc rather many solid reasons why it should progress. l'hat life assurance is profitable as a business, and is certainly a supreme benefit to the individual and the State are undoubted facts. There is therefore some essential clement of success--perhaps the spirit of enterprise—which is almost entirely absent from British life assurance efforts. Over the whole population there is only .£15, 10s. Od. of assurance (es-eluding industrial) per head—zin absurdly inadequate average. And only 2,000,000 policies are in force averaging a sum of £326 each ; yet there is a number of at least 6,000,000 men alone who are eligible and naturally available for assurance. Why are not the remaining 4,000,000 sought out ? Why do they not themselves take the initiative ? This is really a public problem of highest importance. 'Vet its solution seems not to be seriously attempted either by private enterprise or by the huticrously inefficient and almost inert "action" of the State through the Post-Office I.ife Assurance lilepartnient. New Zealand, which has its own State I.ife Assurance Department, can show £10,000,000 of assurance in force in respect of a white population of only 750,000.