Annuity
a sum payable annually for a term of years, or for life, or even forever. A system of life annuities grew up in England in connection with the system of entail according to which the family estate is inherited usually by the oldest son. He was charged with paying a fixed sum annually to the other heirs during their natural lives. In this way the title and the estate not infrequently passed to one son, while the income, owing to falling rents, went to the other heirs. Family pride and public sentiment combine to require the holder of the estate and the family title to settle an annuity for life on needy and dependent relatives.
During the past fifty years the payment of annuities has been taken up on both sides of the Atlantic by corporations, chiefly in connection with life insurance. Policies of many kinds are written. In return for a sum paid in hand the company undertakes to return a fixed amount each year of the purchaser's life, or the policy may be drawn in favor of a relative, as a parent, wife, or child. A favorite form of annuity is a joint annuity, payable so long as either husband or wife may live. Instead of a lump sum, payment is not infrequently made for a series of years, as ten or twenty, at the end of which return payment in the form of an annuity begins.
Annuities are not altogether a modern affair. Traces of the system may be found in the records of Babylon and other oriental centers of commerce. Roman laws prescribed suitable regulations for the payment of annuities. In medieval times speculation sometimes took the form of purchasing annuities based on the lives of persons in whose case longevity was to be expected. The English government sold annuities in 1808-1828, thus funding a large part of the public debt, but lost money by selling too cheaply.
A desire to speculate instead of buying annuities and opportunity for profit through investment has retarded the growth of annuity companies in this country, but as the country grows older and confidence in companies becomes established, this form of investment may become more popular as a means of making provision for old age.
In selling annuities no health examination is required, as the poorer the health of the applicant, the more desirable the sale. In return for a lump sum, say $1,000, the older the applicant the larger the annuity that may be sold safely. An epidemic is disastrous to a life insurance company, but a source of profit to an annuity company. Long lives are profitable to life insurance and a source of loss to annuity companies.
In return for a payment of $1,000 the leading companies agree to pay a person of forty years of age an annuity of $52.75; 45, $58.10; 50, $64.70; 55, $73.50; 60, $86.20; 65, $100; 70, $123.45; 75, $149.95; 80, $180.15.
Anselm (1033-1109), a noted medieval scholar. He was born at Aosta, in Italian Piedmont. He was educated at the convent of Bec in Normandy. Here he became prior, and in 1078 he was made abbot. Under William II and Henry I of England, from 1093 to 1109, he was Archbishop of Canterbury. Anselm adhered stanchly to the principles of Pope Gregory VII. He took for his motto "Credo ut intelligam,"--"I believe in order that I may know." He taught that the believer should advance from direct and simple faith to whatever degree of scientific knowledge may be attainable, but always with faith unshaken. Doctrines taught by the church were not to be questioned. The student might investigate only to learn why the doctrines were true. Anselm's position is thus stated by himself. His words are translated, of course, from the original Latin into English: "Whether that is true which the universal Church believes with the heart and confesses with the mouth, no Christian can be permitted to question; but, while holding fast to it without doubting, and loving and living for this faith, he may and should search in humility for the grounds of this truth. If he is able to add to his faith intelligence, let him thank God; if not, let him not turn against his faith, but bow his head and worship." In the history of philosophy Anselm is known as one of the great school men. See Abelard