The Money Box

A POPULAR toy among children is the money box. It delights them to insert in its ever-open mouth all the spare coins that come their way. In this they are pro- bably following a natural instinct inherited from long ago when life was a struggle for existence. Like the bee, they are storing in times of plenty against times of scarcity. Whether this instinctive providence is directed into fruitful channels depends entirely on the parent. Too often the father or mother regards the contents of the money box as negligible for practical use and the money is frittered in trifling pleasures for the child. A financial expert would take a contrary view. He knows that by method and management these sums can be turned into valuable advantages for the child.

Is the parent willing to utilize the financial expert's services to insure these advantages ? He may perhaps first wish to know just what, the financial expert can do with his boy's small savings. To answer the question it is necessary to resort to a few figures in illustration. Let us assume that the boy receives a shilling a week for his money box. This seems very small, but the financial expert is prepared to undertake its care. A shilling weekly serves as a convenient unit. If a parent is dis- posed to be more generous the benefits to the boy will be proportionately increased. In point of fact, one unit may be devoted to attaining a particular object, and other units to other objects. The financial expert will suggest a wide variety of choice.

Baby will have in his money box on the first anniver- sary of his birth 52 shillings. These will be handed to the financial expert. Similarly, on each succeeding birthday the money box will be emptied of its 52 shillings and passed to the care of the financial expert. By the time the boy reaches his 14th birthday thoughts will be turning seriously to his education and to fitting him for his career. The financial expert will then have something like £45 to the boy's credit. He will be prepared to hand this over in a lump sum, or in three annual instalments of about £16 each, or five annual instalments of about £10 each—according to the wishes of the father.

The father may be in the fortunate position of not requiring this assistance to meet the cost of his son's tuition. The previous arrangement can therefore con- tinue undisturbed. After 21 years the child will have reached man's estate and new considerations will arise.

AT THE AGE OF 21.

The question of his career becomes urgent. On appeal- ing to the financial expert it will be found that he has a sum approximating £80 ready for starting the young man in business. If it is not required for this purpose there are other important uses to which it can be put.

As the boy has become self-supporting, the father will feel no longer called upon to make contributions to the money box, but the accumulated savings furnish a powerful force for influencing his son's future. A young head cannot be expected to display the wisdom of matured experience, and a little kindly guidance and forethought at this age can beneficially affect the lad's subsequent life. The inculcation of habits of thrift and foresight will help in building up his character and in smoothing out difficulties lurking in his path.

Supposing the cash available is not immediately wanted, the financial expert has a number of valuable choices to offer. Sooner or later, the son will wish to marry. His money box will have accustomed him to systematic saving, and he will probably be quite willing to facilitate marriage later by continuing his contributions. These will secure life assurance for about £420 payable at his death. This is more than double the sum procurable if the initiation of the contract be left until the attainment of age 21. The forethought of the parent will have placed the son in the comfortable position of carrying sub- stantial assurance through his life at a very low rate of • premium.

ADVANTAGES OF EARLY INSURANCE.

Unless he is contemplating matrimony, the average healthy young man is loath to assure. Death to him seems remote. There are more immediate and enjoyable ways of spending his money. He puts off what he regard, as an unpleasant duty until he takes a wife, and when the calls upon his purse begin to multiply he has to par e heavier rate of premium than he would if his parents had looked a little ahead.

Should it happen that his health is delicate, the value of life assurance will be impressed upon him. Ile wilt voluntarily seek to obtain a life policy, but will fail to do so unless his parents have previously arranged matters with the financial expert. A medical examination must be passed before an original life assurance will be granted, but under the scheme outlined in this article no examina. tion is required, whatever be the state of health of the beneficiary on attaining age 21. Every parent can guarantee life assurance for his child when he grows up, irrespective of his health, at an extremely low rate of premium.

An endowment assurance payable on the attainment of any agreed age can be chosen instead of a whole life assurance, thereby making provision for old age as well as death. If this course be adopted, the sum assured must of necessity be less. Assuming the desire to be to secure capital at age 40, the sum assured will be about £190. If the selected age be 50, then the sum assured will be about £260. If payment be deferred until age 60, the sum assured will be about £340. Should death occur before the specified age the sum assured will be thereupon paid in full.

PROTECTING THE PARENT.

It may be that the young man on attaining his majority will not appreciate benefits carrying an obligation to make future payments: In the face of the manifestation of such an improvident trait the father may not care that the boy should be entrusted with the sum of £80 in cash available, or to use it for setting him up in business. He has still another course open to him. He can choose for his son a policy, free from any further premiums, providing for the payment of a sum of about £220 at the son's death, or of a lesser sum on his reaching a specified age, or at death should he not survive to that age. The father can feel that he has done something to obviate the worst consequences of the lad's lack of thought for the future. It should be noted that up to this stage the parent has the controlling voice. Not until the son accepts responsibility for the premiums can he deal with the policy.

The parent may say : " All this is excellent so far, but what would happen if I could not pay the premiums ? Supposing I were to die." Well, that contingency is pro- vided for in a simple way. By a small addition to the amount of the premium it can be arranged that no further premiums shall be payable during the period from the date of the parent's death until the son's twenty-first birthday, the policy in all other respects remaining in full force. Medical examination of the parent is rarely required to secure this proviso, which forms an easy and cheap means of obtaining a certain amount of life assur- ance on his own life.

In the event of the son's death before age 21 the pre- miums will be returned in full, either with or without interest, as may be arranged at the inception of the contract, other terms being adjusted accordingly. An end can be made of the policy by the parent at any time on the same conditions. The variations are so many that they cannot be set out in detail in the space at our dis- posal. For instance, if the parent thinks that his son will have developed a greater sense of responsibility at age 25 than at age 21, or that he is more likely by then to be better able to gauge his future wants, the older age can be adopted as the one for exercising the final option. .

Only the broad outlines of the plan have been men- tioned here. Policies of the kind are called Children's Deferred Assurances. They apply equally to girls as well as to boys, and are issued in an almost infinite variety to suit all tastes and needs. Life assurance com- panies will always be pleased to discuss and make modifi- cations to meet individual requirements.

F. M. TOOVEY.