Encyclopaedia Britannica > Volume 3, Anatomy-Astronomy

*
>
ANNUITIES.
225
■Tistory. of life, especially in the latter periods, to be much nearer
^e probabilities of life among mankind in general than he
had previously imagined.
It is satisfactory to find Mr Morgan at last coming into
an opinion, of the truth of which, evidence had previously
been adduced sufficient to convince almost all who at¬
tended to it; and, trusting that he will publish the results
of his latest inquiries on the subject, we shall take no fur¬
ther notice here of the table of the values of annuities
in his pamphlet above mentioned, which, otherwise, we
could not with propriety have avoided.
Mr Morgan (Pamph. p. 42 and 43) asserts that a com¬
parison of columns 3 and 6 of this table (b) affords a
striking proof of the accuracy of the Northampton table ;
but, to judge of that, we consider it is not column 6, but
5, which should be compared with column 3.
In the Transactions of the Cambridge Philosophical So¬
ciety, vol. iii. part 1, are two papers by Mr Lubbock; the
first On the Calculation of Annuities, and on some Ques¬
tions in the Theory of Chances (read May 26, 1828); the
other On the Comparison of various Tables of Annuities
(read March 30, 1829).
In the year 1808 government commenced granting life-
annuities at prices calculated from the Northampton ta¬
ble of mortality, and continued so to grant them for 20
years, at a great loss to the nation, especially when the
lives were young, as was well known at the time to those
who understood the subject; and was mentioned more
than once by the author of the present article, to a very
able and well-informed member of the government, not
long after they commenced granting them. But none
were then granted on lives under 35 years of age ; and
the gentleman alluded to only observed, that the appli¬
cants for annuities were principally aged persons, and it
was desirable that a safe and advantageous mode of em¬
ploying their savings should be afforded them. After the
year 1816 those annuities were granted to persons of all
ages above 21 years.
Although the data necessary for determining the law of
mortality among the people, and the values of pecuniary
interests dependent upon the continuance or the failure of
human life, cannot be obtained without the active concur¬
rence of many persons of influence and authority; yet,
for all the tables containing information of that kind re¬
lative to this country, and published before the year 1829,
the public were indebted to the zeal and industry, and the
separate efforts, of a few individuals.
But in March 1819 Mr Finlaison was appointed by go¬
vernment, with all the aids they could afford him, includ¬
ing proper assistants, and access to the registers of the
nominees in tontines, and others on whose lives annuities
had been granted by government for more than a hundred
years before ; in which registers the exact ages at which
the annuitants were nominated, and those at which they
died, were stated.
Thus the data not otherwise accessible being provided,
and the labour lessened by the number of calculators em¬
ployed—the expense also being defrayed by the public—
at the end of ten years, viz. in March 1829, Mr Finlaison
made a report to the Lords of the Treasury, which was
printed by order of the House of Commons, and, in tables
filling 50 folio pages, shows the rates of mortality, and the
values of annuities on single lives at all ages, among many
different classes of annuitants, both separate and combined;
the sexes being generally distinguished both in exhibiting
the law of mortality and the values of annuities.
These, from the number and accuracy of the data, are
more valuable than any thing of the same kind that had
previously been published; but it is the values of annui¬
ties only which we have to notice here.
VOL. m. ,
The lives on which annuities depend will generally be History,
somewhat better (by which we here mean, will attain to
greater longevity) than the general average of the popu¬
lation, though probably not nearly so much better as many
believe them to be. The prevailing error in the popular
estimate on this subject appears to have arisen in great
measure from comparing the mortality among annuitants
and assured lives, with that represented to take place by
tables of mortality erroneously considered to correspond
with the general average of the people ; while, from be¬
ing constructed on erroneous principles, and from insuffi¬
cient data, or else being derived from observations made
where the mortality was and is much greater than in Bri¬
tain, the mortality according to these tables was consider¬
ably greater than that which actually prevails among the
bulk of the people here. Proofs of this will be found un¬
der the article Law of Mortality.
That the lives on which annuities and assurances de
pend cannot be so very select or so much better than the
common average as has generally been supposed, might
reasonably be expected on these grounds :—
1. As to annuitants.
The lives are not all chosen on account of their pre¬
sumed goodness ; for many persons who have no occasion
to provide for others who may survive them, purchase an¬
nuities on their own lives, only that they may themselves
enjoy the whole benefit of the purchase-money, both
principal and interest, during their lives.
And the greatest recommendation of these lives seems
to be, that they are generally prudent persons, of tempe¬
rate and regular habits.
Many other persons, especially females, spendthrifts,
and faithful servants, enjoy annuities bequeathed to them
by their deceased relatives, masters, or mistresses, as the
most eligible provision for their future comfort and secu¬
rity from want; and there seems little ground to sup¬
pose them to be better lives than the common average of
the same age and sex.
2. In such cases as tontines, where most of the lives
are selected for their presumed goodness, the best crite¬
rion probably is, hereditary longevity in the family of the
nominee; but partiality for their own friends or kindred
often has considerable influence in biassing the judgment
of those who select them.
That they will generally be persons of good constitu¬
tions and regular habits when selected, is all that is like¬
ly to be obtained under these circumstances; and that is
also the case with the average of the population in com¬
fortable circumstances.
Whatever the constitutions and habits of annuitants may
be, the annuities held by them during their own lives, by
protecting them from many of the wants, cares, and anxie¬
ties which the bulk of the people are exposed to, no
doubt contribute to their longevity. But where powerful
motives to raise money by the sale of an annuity on a per¬
son’s own life exist, it is extremely difficult to prevent him
from parting with it, whatever precautions may have been
taken with that view; and with it, he also loses that help
to longevity.
3. Insured lives are also generally supposed to be much
better than the average of the population, as it is incum¬
bent upon the insurance offices to be cautious in select¬
ing them.
But bad lives, by the failure of which persons interested
in them would sustain loss, are most likely to be offered,
and are continually offered, for insurance; and there is
reason to believe that all the caution in selection which
the offices in general can exercise, is necessary to keep
the lives insured up to the average goodness of the bulk
of the population;—supposing always that people in gene-
2 F