A simple life insurance is that by which a
person may leave behind him a sum of money
for the benefit of those who, during his life, have
been dependent upon him. For example, a
husband, whose income is entirely derived from
his own exertions, desires to make some pro-
vision for his wife and children in the event of
his dying before them. At the age of thirty he
may, by paying £25 a year to an Insurance
Office, secure at his death, whenever it may
happen, £1,000, for the benefit of his wife or chil-
dren, or as he may direct by his will. In a way
insurance is a kind of savings bank, but impos-
ing an obligation on the part of the depositor to
save a certain sum every year. In the case of
the bank, the savings are optional, and cease at
death; whereas by insurance, the return of a
large sum is the result of the death of the com-
pulsory depositor. If a person put by £25 every
year and invested that sum in the Government
Funds at 2 1/2 per cent., or deposited the same sum
annually in a bank, at the same rate of interest,
it would take him twenty-eight years to accumu-
late £1,000, if he lived so long; whereas by an
insurance on his life for the same amount, if he
died a week after the first payment of £25 had
been made, the £1,000 insured would be paid to
his representatives. It might be said that if the
person lived longer than the term of twenty-
eight years and went on saving the £25 every
year, he would in the end accumulate more than
£1,000. This, however, is met by insuring in
such manner that the insurance carries “profits,”
that is, additions made by the gains of the office
from time to time. If insurance be made in this
manner, for which a slightly higher rate of pre-
mium is paid, it will be found that, however long
a person might live, more would accrue at death
by insurance than by saving.

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