A contract of life assurance is not merely a contract of indemnity, and is, therefore, assignable. A person is entitled to put any value upon his life that he pleases, and the company accepts him at his own valuation, provided he pays the premiums corresponding to the amount for which he is insured. The policy may be assigned by way of gift or sale, or as a collateral security. The assignment may be made by an endorsement on the policy to that effect, or by a separate deed, which must be properly stamped. A written notice of the date and purpose of the assignment must be given to the company at their principal place of business. The company are entitled to charge the statutory fee of five shillings before sending an acknowledgment of the notice, which should be made in duplicate for their endorsement.
The mere return of a policy of life assurance to the party who assigned it or the destruction of the deed of assignment does not cancel the assignment, and great difficulty will be experienced in getting payment of the sum insured unless the policy is properly re-assigned by deed to the party by whom it was assigned, and notice of the re-assignment, with a fee of 5s. for acknowledging receipt of same, sent to the company.
Suicide If the person assured dies by his own hand or by the hand of justice, the policy becomes absolutely void. This is not the case, however, if he commits suicide while of unsound mind, unless the policy contains express condition that it shall be void if the person whose life is assured commits suicide. Being killed in a duel would also vitiate the policy.
For insuring female lives an extra annual charge is usually made, which is removed on the attainment of the age of fifty. The charge does not generally exceed 5s. per £100 assured.
A policy which is expressed to be "indisputable," can be disputed on the ground of fraud only.
Exemption from Income-tax
All sums paid as premium for life assurance effected by a person on his own life or on the life of his wife are exempted from liability for income-tax to the aggregate extent of one-sixth of the total income. A deduction can. therefore, be made of the amount so paid in premiums in returning the annual statement of assessable income.
As a rule, those engaged in military or seafaring occupations, or travelling or residing beyond certain well-defined limits, are charged extra.
Children may be assured at an early age, and without medical examination, on a returnable or non-returnable scale for a sum payable at death after the age of twenty-one or on attaining the age of fifty. A policy effected on the returnable scale is entitled to the return of all premiums paid to the company if death occurs before the age of twenty-one.
By a single premium or by annual payments, a child may be assured, and receive a sum of money for educational purposes at the age of twenty-one or any other age. If the child dies before attaining the age, the money is returned.