120 ]\Ir W. Eraser on the present Erroneous and 



institution begins with select lives the odds are still greater 

 against rapid mortality during the first few years of an establish- 

 ment. The celebrated Dr Price long ago stated, " that it is not 

 to be expected that any Society can meet with difficulties in its 

 infancy ;" and experience has since amply demonstrated, that of 

 all undertakings, a Life Assurance association, from the pre- 

 miums being paid in advance, and from there being no risk of 

 bad debts, has the least occasion for capital at the commence- 

 ment; and, in proof of this, it may be affirmed, that no in- 

 stance can be given of any such institution, under proper man- 

 agement, ever requiring any part of a subscribed capital to make 

 good the pohcies of the assured. 



For Mutual Assurance associations, the only preliminary pre- 

 cautions are, that the lives be select, and that the extent of the 

 individual risks at first be proportioned to the number and ages 

 of the members, so that their collective annual premiums may 

 of themselves, in one or two years at most, form a sufficient fund 

 for meeting every probable demand. With regard to the re- 

 quisite premiums, it is certainly proper that these should be al- 

 ways made such as fully to cover the risks assured, and to de- 

 fray the expenses of management ; but it is difficult to conceive 

 why they should be 40 or 50 per cent, more than necessary. 

 The value of the prospective claims against Life Assurance 

 Companies may now be calculated with very great accuracy (as 

 even the periodical computation of a surplus necessarily im- 

 plies) ; and hence there is no necessity for taxing the members 

 to accumulate a large surplus fund, merely for the purpose of 

 being again divided and distributed among them under the name 

 of bonuses. 



Besides, the bonus system is any thing but a just or equita- 

 ble one. The surpluses have chiefly arisen from fewer deaths 

 occurring among the members of the middle and younger ages 

 than were calculated to happen by the mortality tables hitherto 

 in use, as in the more advanced ages these tables are pretty 

 nearly correct, and, consequently, little or no surplus then arises 

 from the contributions of the older members. Such being the 

 case, the latter should then also cease to derive any additional 

 benefit from a subsequent extra accumulation of capital ; where- 

 as the practice is for all, after a certain period of contribution, 



