220 
during life, shall pay to them an annual 
premium, fixed by themselves. 
In order to obtain insurers, various 
benefits have been promised, and va- 
rious methods pursued in the mode of 
effecting the insurance. In some in- 
stances—and these, perhaps, are the 
most common—the insured are per- 
mitted to share, with the original pro- 
prietors, a certain proportion of the ac- 
cumulated profits, after having paid 
their premiums during a certain num- 
ber of years. In others, a reduction of 
the premiums has been made, with the 
same prospective advantages; and, in 
one instance, the West of England, the 
remiums have been reduced equably 
we believe 10 per cent.) throughout, 
without admitting the insured to any 
benefit of the profits. In every in- 
stance, the reduction has been made on 
the tables calculated for the Equitable 
Society, which are found, by experience, 
to be, for more than one reason, by far 
too high to constitute a fair rate of 
premium. But premiums ought not to 
be reduced rashly; it is the greatest 
possible fallacy, to hold out prospects 
of superior benefit by an extensive and 
enticing reduction: for all such pro- 
ceedings should be regulated by the 
most minute and rigid calculations. 
Thus, if a premium should be fixed, 
which cannot, by compound interest, 
realize a profit to the office, calculating 
upon the probable duration of life, the 
company will sustain a decided loss ; 
for it must be obvious to every one, 
that if a person insures his life for 
£100, and he is of such an age, that 
the premium paid by him—we will say 
for the ten years, which, it is supposed, 
he will live—amounts, with the interest, 
to only £90—here is a loss of £10 to 
the company. ‘This, of course, is put- 
ting the result of chance out of the 
question; for every office ought to pro- 
ceed upon true and undeviating prin- 
ciples, and make its calculations ac- 
cordingly. One of the most abundant 
sources of profit to an insurance com- 
pany, is the effecting of insurances for 
limited terms: but this ought not to 
be taken into consideration, so as to 
affect the premiums of insurances for 
the whole term of life; and its result 
cannot, indeed, be ascertained till some 
years of experience have elapsed. 
With regard to an indiscriminate re- 
duction of premiums, as adopted by the 
West of England Office, we can see 
neither the wisdom nor the justice of 
Insurance Companies. 
{April 1, 
such a plan: for it is well known that 
there is not the same chance of profit 
upon old lives as there is upon young 
ones. The reduced rate of public in- 
terest has made the risk somewhat un- 
favourable, even upon the premiums of 
‘the elder lives, as calculated by the 
Equitable Society ; and how a reduc- 
of 10 per cent. upon those premiums 
can be safe or expedient we are at a 
loss to discover; but the West of Eng- 
land has tried it—with what success 
we are not rightly informed. That a 
reduction on the premiums of the 
Equitable may be safely made is indis- 
putable; but they must be made with 
caution and judgment. The younger 
lives, to forty-five or fifty, will bear a 
more ample reduction than those which 
are older : but, even here, it must be gra- 
dual and nicely proportioned, and regu- 
lated according to the existing value of 
money, as indicated by the price of the 
stocks, and the rate of public interest. 
The prospects of profit, which insu- 
rance societies hold out, are often 
splendid and captivating; but by those 
who are well acquainted with the prin- 
ciples on which these profits are to be 
realized, these sonorous annunciations 
will be received with caution. All 
must, and all does, depend upon the 
skilful and prudent management of the 
business. The Equitable Society has 
been too often considered as a model 
and an incitement for the establishment 
of similar instisations: but it must be 
remembered, that this society has had 
advantages which are not likely to ac- 
crue to any new company. It com- 
menced its business at a period when 
it had but few competitors; and de- 
rived all the benefit of a low state of 
the stocks, and a high rate of interest : 
it has been managed, moreover, by 
William Morgan. Institutions, now 
established, have to contend with 
much energetic competitien — with a 
high state of stocks, and a low rate of 
interest. Itis true that they are ena- 
bled to proceed on more accurate data 
than the earlier offices; but the disad- 
vantages which they must surmount are 
predominant. 
The first years of an insurance com- 
pany must be years of accumulation, 
but not of profit. It has been said by 
Dr. Price, and substantiated by expe- 
rience, “ that it is not to be expected 
that any society can meet with difficul- 
ties in its infancy; because, not till the 
run of many years after it has acquired 
its 
