The history of life insurance is not very difficult to understand. Today, life insurance is simply the contract between a single individual and an insurance company that dictates that the company must pay the policyholder’s beneficiary if the insured dies. But where does the idea of being insured at death come from? Who were the first people to implement this idea? What did they do when the amounts of money were not as high as those of life insurance companies today? When did the real life insurance industry start? These are all quite interesting questions and the fact is that some of them are largely unanswerable; however, we know a lot about the history of this wonderful thing that nowadays covers people all over the world.
The first signs in the history of life insurance
Historians have been searching for the true beginning of life insurance as we know it, but first they have deciphered the small steps that ultimately led to the actual payment of the death benefit. According to the Financial Shopper Network in ancient China, sailors prevented pirates from stealing all their goods by transporting portions of other ships’ cargo, so if a pirate stole a ship’s cargo, the entire cargo would not be lost. A little later, in Babylon, merchants simply gave loans that had to be repaid when the contents of the trade were safely delivered.
So what does this have to do with life insurance? Well, both civilizations were avoiding losing everything. They were taking small baby steps that would help in the long run. However, life insurance as we know it; It started in the city of Rome. The people of this highly advanced civilization decided to form what they called “burial clubs.” These clubs were designed for a single purpose, in the event of the unexpected death of a club member; everyone else would be willing to pay the funeral expenses and help the survivor’s family with some money. The concept of life insurance as they knew it ended dramatically in AD 450 when the Roman Empire fell and its practices were abandoned for a long period of time. It is also important to note that many historians agree that around the same time as Rome, the Indian Empire and its citizens also formed “burial clubs” to pay for funerals and help people with expenses. One clue to this according to the Financial Shopper Network is that “yogakshema, the name of the Indian Corporate Headquarters Life Insurance Corporation” refers to the Vedas.
Great Britain and its step in the history of life insurance
However, modern life insurance didn’t get started until the British decided to give it a try and make it work. The practice of life insurance took hold throughout the European continent except England, and it was exactly the British who started the most prominent life insurance companies known in European countries today. It was in the mid-17th century that on the streets of London, England, a group of people met at Lloyd’s Coffee House and decided to come up with life insurance ideas. The cafeteria was a famous place for tradesmen, shipowners, and merchants and would therefore be the perfect place to discuss life insurance knowing that most of those people had money.
History of life insurance in the United States
Since the British knew the basics of life insurance and things that could help people like the life insurance industry, they decided to give it a try in the United States of America. After discussing how they would decide to come up with the first life insurance company, they decided to build on the well-known British model at the time. The first life insurance company on American soil was founded in the Southern Colony of Charleston, South Carolina in the year 1735.
About 20 years later, the entire colonies saw that this was a good idea, so the Philadelphia Presbyterian Synod decided to sponsor the first life insurance corporation in the United States, which wrote its first policy in 1761. It turned out to be quite a challenge to get everything up and running.
The life insurance industry as we know it really took off in the 1840s because these religious groups calmed down and no longer interfered with government business. Another big reason life insurance companies came up turned out to be the New York and Chicago fires that killed a ton of people in each of the two cities. After this, more and more life insurance companies began to emerge and in the 1900’s the business really grew. People wanted to be protected in the event of an accidental death.
The 1900s proved to be an era of growth for the life insurance industry. Two wars followed and many people decided to insure themselves to establish a secure financial future for their families. It is also said that after an attack on the country more people buy life insurance policies. No one can deny that simply because after Pearl Harbor, a group of people panicked and decided to take out policies fearing for their lives. The same is true after the turn of the century when the attacks on the World Trade Center occurred. People decided that not having protection was worth it and that a small premium each month was better than leaving their families financially burdened.
life insurance today
As you can see, life insurance has come a long way since it started in Rome and India. Large corporations with great power and global interaction have emerged. Companies have emerged that have a lot to say in both the economic and political world. As you can see, the market right now is booming and there are many life insurance companies coming to life. Who knows what will happen in the future, but from now on customers should be happy with their options and the thousands of companies they can choose from!
