Chapter XXXIV: Appendix: J

THE POST OFFICE INSURANCE FUND

The suggestion to establish a State Life Assurance was first made in 1872 by Sir Richard Temple, the Finance Member of Council. After a great deal of discussion it was dropped in 1873, but was revived again in 1881 by Mr. Hogg, the Director-General of the Post Office, when it was accepted by the Viceroy's Council and finally by the Secretary of State.

The principal features of the scheme which was actually introduced on the 1st February, 1884, were:

(1) For the time the Fund was confined to the employés of the Post
Office.

(2) Provision was made for effecting life insurance in three ways,
viz.--

(i) By a single payment.
(ii) By monthly payments until the person insured attained the
age of 50 or 55.
(iii) By monthly payments during life.

(3) Provision was also made for two classes of monthly allowances, viz.
"Immediate" or "Deferred."

(4) One life could be insured for any sum which was a multiple of Rs.50
up to the total of Rs.4,000, and the monthly allowance granted on any
one life might consist of any sum which was a multiple of Rs.8 up to
the limit of Rs.50.

(5) Medical examination of proposers for insurance was made free.

(6) Arrangements were made for the deduction of the monthly premia from
the insured person's salary except the first premium or premium paid
during leave without pay.

(7) Policies and contracts issued under the scheme were exempt from
stamp duty.

The scheme worked smoothly, and, taking into consideration that many employés of the Post Office are poorly paid officials, a fair measure of success was attained during the first few years except in the Monthly Allowance branch and in the system of Life Insurance by single payment. The following figures show the proportion of officials who availed themselves of insurance during the first three years:--

1884-85 1·05% of the whole Post Office establishment.
1885-86 1·46% " " "
1886-87 1·79% " " "

In 1887 the rule under which one-half surrender value could be allowed on all policies and contracts when payment had been discontinued was modified so as to exclude from this privilege policies and contracts on which three years' premia or subscriptions had not been paid. In September, 1887, the Fund was opened to the Telegraph Department, and in 1895 to employés of the Indo-European Telegraphs and to women employed in all the departments.

With effect from the 1st February, 1898, the benefits of the scheme were extended generally to all permanent Government servants whose pay was audited in Civil or Public Works Account offices and all members of establishments of the Military Department, under audit of the Military Account offices, who were subject to Civil rules. From the same date a system of Endowment Assurances providing for payment at any age between 45 and 55 was introduced. With this general extension of the scheme it was decided that the medical examination of proposers for insurance should be more stringent and that medical officers, who had until then been examining proposers for insurance free of any charge, should be allowed a fee of Rs.4 for each examination, as their insurance work would be substantially increased. In the same year (1898) the system of Life Insurance by a single payment which had proved to be a failure, was abolished.

In 1899, Temporary Engineers and Temporary Upper Subordinates of the Public Works Department were allowed by Government to be admissible to the benefits of the Fund, provided that the Chief Engineer declared that they were eligible for admission. In 1903 it was extended to permanent Government servants in foreign service in India, and in the same year Life Insurance policies were allowed to be converted into Endowment Assurance policies.

In 1904, the following relaxations of the rules were sanctioned with a view to meet the convenience of Government servants.

(1) Insured persons who had retired from the service and whose
pensions were paid in India were allowed the option of deducting their
premia or subscriptions from their pension bills instead of being
compelled to pay them in cash at a post office.

(2) When there was any difficulty in the way of a proposal being
signed by the proposer in the presence of his immediate superior,
this duty might, with the permission of the Postmaster-General,
be performed in the presence of the local postmaster or any other
responsible officer who had to sign the certificate.

(3) The table of subscriptions for "Immediate Monthly Allowance,"
which contained rates up to the age of sixty, was extended so as to
provide for contracts with persons above that age.

In the same year the benefits of the Fund were extended to Temporary Lower Subordinates, clerks of the Public Works Department and to clerks of the Punjab University on the same conditions as to Temporary Engineers and Temporary Upper Subordinates.

The year 1907 witnessed several important changes in the Post Office Insurance Fund made on the recommendation of the Government Actuary. These were:

(1) That the sums eventually payable in respect of policies in
existence on 31st March, 1907, in the Life Branch of the Fund were
increased by 10 per cent and that the premia payable in respect of
sums assured in that branch after that date would be correspondingly
reduced. The rates of premia for Life Insurance were revised
accordingly.

(2) That a life policy, with monthly payments payable till death,
was allowed to be converted into a life policy with monthly payments
payable to a specified age or into a fully paid up policy payable at
death.

(3) That an endowment policy might be converted into a paid-up policy
payable at some anterior date or at death, if earlier.

(4) That insurants could reduce their monthly premia to any desired
extent from any specified date.

(5) That when a policy of either class was surrendered the policy
holder should be given the full surrender value which on an actuarial
calculation could be paid without loss to the Fund, instead of half
that amount as hitherto given.

(6) That the surrender value of a lapsed policy was payable at any
time after default, on application being made for the same.

(7) That the period up to which payment of arrears of premium or
subscription was allowed for the revival of a policy of less than
three years' duration was extended from three to six months.

The tables of premia, introduced at the time the Fund was started, as already stated, were calculated on the mortality rates which had been deduced from the experience of the Uncovenanted Service Family Pension Fund, Bengal--a Fund which was confined to Europeans resident in India--there being no more reliable mortality statistics available for the purpose at the time. In 1909 the India Office Actuary, in his review on the operations of the Fund for the year 1907-08, noticed that, in view of the rapid growth of the scheme, it was necessary to revise the tables according to more accurate mortality statistics. In his review on the work of the Fund for 1908-09 the Actuary asked for detailed particulars of all the policies issued by the Fund since its institution in the form of statements, in order to enable him to deduce therefrom the necessary mortality rates, and thus prepare fresh tables of premia. These statistics were submitted with the Director-General's Annual Report on the operations of the Fund for the year 1910-11.

In the meantime it was brought to notice in 1909 that, under the existing method of calculating surrender values of Life policies, the values in certain cases were found on calculation to be considerably in excess of the total amount of premia paid on the policies. Taking advantage of this, insurants began to surrender their policies in large numbers. The matter was referred to the Secretary of State. As a result, the Actuary at the India Office forwarded revised tables for the calculation of surrender values of Life policies, to be used until the general revision of the Mortality tables and of the tables of premia, which had been under contemplation, was effected. In 1909 an important concession was sanctioned regarding the payment of premia by insured persons while on leave or suspension or when retiring. It was laid down that an insured person should not be considered as in arrears of premium or subscription for any month so long as he has not drawn any pay, pension or suspension allowance.

In 1910, with a view to afford greater facilities to the lower grades of postal servants to insure their lives and to popularize the Fund, sanction was obtained to grant to these officials from the Post Office Guarantee Fund travelling expenses actually incurred by them in their journey for examination by the medical officer for insurance, provided the proposer actually took out a policy and paid the premium for not less than twelve months. In 1912 Mr. Ackland, the Actuary at the India Office, made a thorough investigation into the past experience of the Fund from the statistics furnished to him. He drew up a report showing the results of the investigation and prepared fresh tables of mortality statistics, as well as new tables of premia for both Life Insurance and Endowment Assurance. He also prepared new formulæ for the calculation of paid-up policies, surrender values, etc., and recommended the following further concessions and changes:--

(1) The grant to all policy holders on the 31st March, 1912 (the
valuation date), of a bonus at the rate of 2 per cent per annum in
the case of Whole Life Assurances, and at 1 per cent in the case of
Endowment Assurances in respect of each month's premium paid since
31st March, 1907, up to 31st March, 1912.

(2) The grant of an interim bonus at half of the above rates in
respect of the premiums paid since 31st March, 1912, in the case of
policies which became claims by death or survivance between 1st April,
1912, and 31st March, 1917, provided that premiums have been paid for
at least five years and up to date of death or survivance.

(3) "Age next birthday" should be taken as the age at entry for all
classes of Assurances.

(4) An integral number of years' premia should be charged on Endowment
Assurance policies and Life policies with limited payments.

(5) Transfers from the Whole Life to the Endowment Assurance class or
vice versa should be allowed only after any number of complete years'
premia have been paid.

(6) When surrender values were granted in the Monthly Allowance class,
medical examination at the policy holder's expense should be insisted
on and payment should in no case exceed 95 per cent of the present
value of the monthly allowance.

(7) Policy holders should be allowed to commute future premia by
payment either of a lump sum or of an increased monthly premium
ceasing at age 50 or 55.

(8) Transfers from the Endowment Assurance to the Whole Life
class should be allowed only on the production of a fresh medical
certificate obtained at the policy holder's expense.

(9) The valuations of the Fund should be made at quinquennial
intervals.

It was also decided that, as an Actuary had been appointed by the Government of India, all questions relating to the administration of the Fund, as well as future valuations of the Fund, might be dealt with by that officer instead of being submitted to the Secretary of State.

INDEX

Abolition of District Post, 20

Abolition of Sea Post Office, 135

Abolition of unpaid postcards, 7

Abor Expedition, 1894, 220

Abor Expeditionary Force, 1911-12, 231

Abyssinian Expedition, 210

Accounts, Postal, 36

Act, Post Office. _See_ Post Office Act

Address, Forms of, 89, 98

Aden, Military operations in neighbourhood of, 175

Aden, Transhipment of mails at, 130, 133

Admiralty Agents, 127, 129, 130

Afghanistan Expedition, 168, 211

Anche, The, 112, 116

Anchel, The, 112

Aviation, 125

Bagdad Railway, 148, 149

Baku, Field service in, 174

Bank, Savings, 81

Base office, 166, 169, 175

Base Postal Depot, 175

Bazar Valley Field Force, 230

Beadon, Mr., 21

"Bearing" correspondence, 7, 25, 34, 158, 160

Bhangy post, 26, 29, 33, 48

Black Hole of Calcutta, 108, 200

Black Mountain Expedition, 217

Black Mountain or Hazara Field Force, 215

Bombay G.P.O. building, 108

Bombay Regulation XI of 1830, 26

Branch office, 4

Brindisi as European port for Indian mails, 124, 182

British India Steam Navigation Company, 138, 142

British Mission Escort in South Persia, 175

British postal orders, 42

Buildings, Post Office, 106

Bullock train, 154, 168, 196

Buner Field Force, 223

Bungalows, Dak or Travellers', 17, 196

Burlton, Mr. S. P., 14

Burma, Chin Expedition, 215

Bushire Force, 174

Calcutta, Black Hole of, 108, 200

Calcutta G.P.O. building, 108, 200

Camel dak, 209

Cape route to India, The, 118, 123

Cash certificates, Five-year, 87

Cash on Delivery system, 40, 46, 50, 51

Caste, 101

Centres, Delivery, 102

Chin Expedition, Burma, 215

Chin Hills Expedition, 218

Chin Lushai Expedition, 216

China Expeditionary Force, 226

Chitral Relief Force, 221

"Clubbing," 24

Combined post and telegraph offices, Introduction of, 41

Commission of 1850, 1, 21, 178

Compiler of Post Office Accounts, 36, 72

Compulsory prepayment of postage in all cases, Rejection of, 25

Constantinople, Field service in, 174

Construction and maintenance of postal vans, 63

Consultations of 24th March, 1766, Minutes of, 12

Consultations of 17th January, 1774, Extract from, 191

Continuous delivery system, 103

Control of the Department, 2, 30, 31

Conventions with Indian States, 114

Copper tickets, or tokens for postal purposes, 14, 178, 194

Cost of carrying mails on railways, 62

Counterfeit stamps, 39, 42

Courtney, Mr., 21

Crises in the Savings Bank, 84

Custom-House, Turkish, at Bagdad and Basra, 140, 146

Customs regulations, 36

Cyprus, 211

Dak bungalows, 17, 196

Dak system, 195

Dead Letter Office, 26

Delivery centres, 102

Delivery of mails, 102

Delivery system, Continuous, 103

Department, Control of the, 2, 30, 31

Department, never regarded as revenue-producing, 9, 22

Department, Organization of the, 3, 30, 31

Depot, Base Postal, 175

Deputy Postmaster, 155, 193

Desert post, The, 122, 137, 139

Direction, Organization of the, 2

Director-General of the Post Office, First, 36

Distance, Uniformity of postage irrespective of, 24, 32, 39, 49

District dawk stamps, Scinde, 31, 178

District Post, 16, 17

District Post, Abolition of, 20

District Savings Banks, 81

Dromedary post, 137, 139

Early Postal Regulations, 26

East Africa, Field service in, 174

East Persian Cordon, 174

Egypt during the Great War, Field service in, 171, 173

Egypt Expeditionary Force, 212

Encouragement of prepayment of postage, 34

England, Parcel post with, 39, 50

English mail, 30, 121, 127, 142

Euphrates and Tigris Steam Navigation Company, 138, 142, 144

European port for reception and despatch of Indian mails, 124, 182

Experimental post offices, 20, 96

Ferry charges upon Railway steamers, 63, 65

Field Post Office, The, 165

Field post offices, 166

Field Service Manual, 166

Field service, Military rank on, 166

Field service uniform, 166

Fines incurred under Post Office Acts, 29

Fining, 37

First appointment of a Postmaster-General, 14

First Director-General of the Post Office, 36

Five-year cash certificates, 87

Forbes, Mr., 21

Force in East Persia, 174

Foreign money orders, 73

Foreign parcel post, 51

France, Field service in, 171

Franking, 35

Free postage, Abolition of privilege of, 35

Free postage, Grant of privilege of, to certain persons, 27

Gallipoli, Field service in, 173

Great War, 170, 171

Great War, Effect of, upon savings bank balances, 87

Guarantee Fund, Post Office, 236

Haulage charges, 60, 67

Hazara Field Force, Black Mountain or, 215

Head Office, 3

Horse transit and bullock train, 153, 168, 196, 206

Identification of payees of money orders, 79, 99

Imperial Penny Postage Scheme, 40

Imported and locally produced printed matter, Differentiation between, 32, 38

Indian Convention States, 114, 185

Indian Mutiny, The Post Office during the, 151, 167, 196, 204

Indian States, The Post Office in, 112

Insurance fee, 41

Insurance system in the Persian Gulf and Turkish Arabia, 141

Introduction of first regular postal system by Lord Clive, 12

Introduction of postage stamps, 31, 32, 178, 179

Introduction of postcards, 7

Introduction of railways, 30

Iraq, 148, 173

Isazai Field Force, 219

Kalahandi Expedition, 212

Kurram Field Force, 219

Kut, 173

Land revenue money orders, 75

Later Postal Regulations, 38

Letter-writers, Professional, 94

Life Insurance policies, Surrender values of, 236

Life Insurance, Postal, 42, 232

Loan, War, 87

Lord Clive, Regular postal system introduced by, 12

Lushai Expedition, 216

Mail runner, 4

Malakand Field Force, 222

Malta Expeditionary Force, 211

Malwa Field Force, 156

Manipur Expedition, 218

Manual, Post Office, 2, 36

Manual (War), Postal, 166

Marine Postal Service, Suez and Bombay, 130

Marseilles as European port for Indian mails, 124, 182

Mesopotamia and the Persian Gulf, The Post Office in, 137

Mesopotamia, Field service in, 171

Methods of travel in early days, 195

Military pensioners, Payment of, 42

Military rank on field service, 166

Minors' accounts, 86

Minutes of Consultations of 24th March, 1766, 12

Miranzai Expedition, 218

Mishmi Expedition, 226

Mohmand Field Force, 1897, 223

Mohmand Field Force, 1908, 231

Money order work transferred to Post Office, 41, 71

Money orders, 71

Money orders, Foreign, 73

Money orders, Inland, Statement of issues since 1880, 198

Money orders, Land revenue, 75

Money orders, Rent, 76

Money orders, Telegraphic, 74, 77

Monopoly, Postal, 26, 31

Mosul, Turkish post to Constantinople via, 139

Mounted post, First employment of, 11

Mutiny, The Post Office during the Indian, 151, 167, 196, 204

Naval Agents, 127, 129, 130

Newspapers, Registered, 43

Newspapers, Sale of, by field post offices, 223, 224

Non-postal work, 9

Octroi Tax, 53

Official articles, Special postage rates for, 40

Official marks of the Post Office, Acceptance of, as evidence, 43

Organization of the Department, 3, 30, 31

Organization of the Direction, 2

Origin of the Post Office, 10

Overland Route, The, 119, 137

Overprinted postage stamps, 115, 148, 182, 184, 228

Overprinted Turkish postage stamps, 148

Overprints, Indian Convention States, 115, 185

Overseer, 99, 166

Palestine, Field service in, 173

Parcel post, 48

Parcel post, Foreign, 51

Parcel post rates, Statement of, 55

Parcel post with England, 39, 50

Parcels and packets liable to be detained, 43

Paton, Mr. G., 157, 204

Payment of money orders at houses of payees, 77, 99

Peninsular and Oriental Steamship Company,
Charter of incorporation of, 123, 127

Penjdeh Affair, 84

Penny Postage Scheme, Imperial, 40

Persian Expedition, 167

Persian Gulf and Turkish Arabia, Insurance system in the, 141

Persian Gulf, The Post Office in Mesopotamia and the, 137

Personnel of the Post Office, 189

Phulkian States, Conventions with, 114

Pishin Field Force, 214

Polymetrical tables, 33

Post, Bhangy, 26, 29, 33, 48

Post, District, 16, 17

Post, District, Abolition of, 20

Post Office Act--
of 1837, 17, 26
of 1838, 29
of 1839, 29
of 1854, 2, 31
of 1866, 38
of 1882, 42
of 1895, 42
of 1896, 42
of 1898, 42
of 1912, 46

Post Office, Branch, 4, 94

Post Office buildings, 106

Post Office, Experimental, 20, 96

Post Office, Field, 166

Post Office, Head, 3

Post Office Manual, 2, 36

Post Office, Origin of, 10

Post Office, Sub, 3

Post Office, Travelling, 58

Post free, Grant to certain persons of privilege of sending and
receiving correspondence, 27

Postage rates, 28, 38, 55

Postage stamps, Introduction of, 31, 32, 178, 179

Postal Life Insurance, 42

Postal Manual (War), 166

Postcards, Abolition of unpaid, 7

Postcards, Introduction of, 7

Postcards, Unpaid, 7

Postman, 97

Postman, Village or rural, 4, 94, 100

Postmaster, Deputy, 155, 193

Postmaster, Probationary, 190

Postmaster-General, First appointment of, 14, 193

Prepayment of postage, Encouragement of, 34

Prepayment of postage in all cases, Compulsory, Rejection of, 25

Presidency Postmaster, 16, 30, 31

Private posts, 17

Probationary Postmaster, 190

Probationary Superintendent, 189

Professional letter-writers, 94

Public Proceedings of 7th July, 1766, Extract from, 13

Quinine, Sale of, 4, 96

Railway Conference Association, 49, 67

Railway Mail Service, 58

Railways, Introduction of, 30

Rates of postage, 28, 38, 55

Receipt stamp, Abolition of special, 183

Redirected letters, Abolition of charge on, 39

Registered newspapers, 43

Registration, 35

Registration fee to be prepaid in postage stamps, 39

Regular postal system introduced by Lord Clive, 12

Regulations, Early Postal, 26

Regulations, Later Postal, 38

Rent money orders, 76

Rented buildings for post offices, 106, 110

Returned Letter Office at Basra, 172

Revenue-producing, Department never regarded as, 9, 22

Riddell, Mr. H. B., 36, 154, 163

Runner, Mail, 4

Rural postman, 4, 94, 100

Russian Scare, 84

Salonika, Field service in, 173

Savings bank, 81

Savings bank balances, Effect of Great War upon, 87

Savings bank, statement showing work from 1882 to 1918, 197

Savings bank work transferred to Post Office, 41, 82

Scinde District Dawk stamps, 31, 178

Sea Customs Act, 43

Sea Post Office, 127

Sea Post Office, Abolition of, 135

Seamen's letters, Soldiers' and, 40, 181

Service stamps, 35, 40, 184

Ship postage, 26, 34, 37

Sikkim Expedition, 214

"Snowball" system, Sale of goods on the, 53

Soldiers' and seamens' letters, 40, 181

Somaliland Field Force, 229

Sorting, Concentration of, 69

Sorting offices, Introduction of, 37, 58

South Persia, British Mission Escort in, 175

Southampton route, 123, 124

Special postage rates for official articles, 40

Stamps, Employment of postage stamps in place of telegraph, 183

Stamps, Overprinted or surcharged postage, 115, 148, 182, 184, 228

Stamps, Service, 35, 40, 184

Standard vans, 61

Suakim Expedition, 1896, 222

Suakim Field Post Office, 1885, 213

Sub-office, 3

Suez Canal, Opening of, 124

Suez Canal route, Future of, 125

Superintendent, 189

Superintendent, Probationary, 189

Suppression of foreign post offices in Ottoman dominions,
Turkish demand for, 139, 147

Surcharged postage stamps, 182, 184

Surrender values of Life Insurance policies, 236

Swat Valley Column, 225

Taylor, Captain, 17

Telegraph stamps, Employment of postage stamps in place of, 183

Telegraphic money orders, 74, 77

Thuillier, General Sir Henry, 179, 181

Tibet Mission, 229

Tirah Expedition, 224

Tochi Field Force, 224

Tochi Valley Field Force, 225

Transhipment of mails at Aden, 130, 133

Travel in early days, Methods of, 195

Travellers' bungalows, 17, 196

Travelling post office, 58

Turkish Arabia, Insurance system in the Persian Gulf and, 141

Turkish Customs House at Bagdad and Basra, 140, 146

Turkish post to Constantinople via Mosul, 139

Turkish postage stamps overprinted, 148

Unification of Indian State Posts with the Imperial Post Office, 115

Uniform, Field service, 166

Uniform, Postmen's, 104

Uniformity of postage irrespective of distance, 24, 32, 39, 49

Unpaid correspondence, 7, 25, 34, 158, 160

Upper Burma Expedition, 213

Value-payable system, 40, 46, 50, 51

Vans, Construction and maintenance of postal, 63, 66

Vans, Standard, 61

Village postman, 4, 94, 100

Waghorn, Lieutenant Thomas, 122

Wano Expedition, 220

War Loan, 87

Watermarks, 180, 182

Waziristan Field Force, 220

Wuntho Expedition, 219

Zhob Expedition, 217

Transcriber's Notes

Obvious punctuation errors repaired.

Hyphen removed: missending (p. 69), upcountry (p. 30).

p. 25: "addresses" changed to "addressees" (read by the addressees).

p. 55: Last column of third row of table changed from "41" to "14".

p. 91: "seldoms" changed to "seldom" (He seldom knows English).

p. 205: "Bolundshahur" changed to "Bulundshahur" (although Bulundshahur and a large portion of Allyghur).