The history of life insurance

Wang Yan

Global Courant
The history of life insurance is not difficult to understand. Today, life insurance is simply the contract between a single person and an insurance company that dictates that the company must pay the policyholder’s beneficiary if the insured dies. But where did the idea of ​​being insured in the event of death come from? Who were the first people to implement this idea? What did they do when the cash amounts were not as high as those of the life insurance industry companies today? When did the actual life insurance industry begin? These are all quite interesting questions and the fact is that some of them cannot be answered to a great extent; however, we know a lot about the history of this wonderful thing that today includes people from all over the world.

The first few signs in life insurance history

Historians have searched for the true beginnings of life insurance as we know it, but they first deciphered the baby steps that eventually ended in the actual death benefit. According to the Financial Shopper Network in ancient China, sailors would prevent pirates from stealing all of their goods by carrying parts of other ships’ cargoes, so that if a pirate stole one ship’s cargo, the entire cargo would not be lost. A little later in Babylon, merchants simply issued loans that had to be repaid when the contents of the trade were delivered safely.

What does this have to do with life insurance? Well, both civilizations avoided losing everything. They took small baby steps that would help in the long run. Life insurance as we know it; started in the city of Rome. The people of this very advanced civilization decided to form what they called “funeral clubs”. These clubs are designed with only one purpose: in the event of an unexpected death of a club member; everyone else would be willing to pay their 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 time. It is also important to emphasize that many historians agree that the Indian Empire and its citizens also formed “funeral clubs” around the same time in Rome to pay for funerals and help people with expenses. An indication of this according to the Financial Shopper Network is that the “yogakshema, the name of Life Insurance Corporation of Indian’s Corporate Headquarters” refers to the Vedas.

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The actual life insurance industry as we know it really took off in the year 1840 as those religious groups calmed down and stopped interfering in government affairs. Another major reason for the emergence of life insurance companies turned out to be the New York and Chicago fires that took the lives of a slew of people in each of the two cities. After this, more and more life insurance companies came along and in the 1900s 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 went through and many people decided to take out insurance to build a secure financial future for their families. It is also said that after an attack on the country, more people buy life insurance. No one can dispute that simply because after Pearl Harbor a group of people panicked and decided to open policies out of fear for their lives. The same is true after the turn of the century, when the attacks on the World Trade Center took place. People decided that it wasn’t worth having no protection and that a small monthly premium was better than leaving their families in financial trouble.

Life insurance today

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