The First Few Signs in Life Insurance History

Historians have been searching for the true start of life insurance as we know it, but they have first deciphered the baby steps that finally ended in the actual death benefit payment. According to the Financial Shopper Network in Ancient China sailors would prevent pirates from stealing all their goods by carrying portions of other ships cargos, this way if a pirate stole the cargo of one ship, the entire load would not be lost. A little bit later in Babylon traders simply gave loans that had to be repaid when the contents of the trade were delivered safely.

So what does this have to do with life insurance? Well both of those civilizations were preventing losing it all. They were doing little baby steps that would help in the long run. Life insurance as we know it however; 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 with one sole purpose, in case of an unexpected death of a club member; everyone else would be willing to pay for their funerary expenses and help the family of the survivor with some money. The concept of life insurance as they knew it ended dramatically in the year 450 A.D. when the Roman Empire fell and its practices were abandoned for a long period of time. It is also important to highlight that many historians agree that about at the same time of Rome, the Indian Empire and its citizens also formed “burial clubs” in order to pay for funerals and help people with expenses. A clue 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.

Britain and It’s Footstep in Life Insurance History

Modern life insurance however did not start until the British decided to try and make it work. The practice of life insurance was banded in the entire continent of Europe except for England and it was exactly the British that started the most prominent life insurance companies known to the European countries today. It was in the middle of the 17th century that in the streets of London, England a group of people met together at Lloyd’s Coffee house and decided to come about with life insurance ideas. The coffee house was a famous place for merchants, ship owners and traders and therefore it would be the perfect place to discuss life insurance knowing that most of those people had money.

Life Insurance History in the United States

With the British knowing the basics of life insurance and the things that could help people like the life insurance industry, they decided to give it a try in the United States of America. After talking about how they would decide on coming about with the first life insurance company, they decided to base it on the well known British model at the time. The first life insurance company in 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 Presbyterian Synod of Philadelphia decided to sponsor the first life insurance corporation in the United States, which wrote its first policy in the year 1761. The bad thing about life insurance at that time was that many religious groups opposed it because it would be like anticipating one’s own death and with the religious fervor in the North American Colonies at the time; it proved to be quite a challenge to get the whole thing started.

The actual life insurance industry as we know it really took off in the year 1840 because those religious groups calmed down and didn’t interfere with governmental affairs anymore. Another big reason that life insurance companies came about proved to be the New York and Chicago Fire’s that killed a whole bunch of people in each of the two cities. After this more and more life insurance companies started coming about and in the 1900’s business really grew. People wanted to be protected in case of an accidental death.

The 1900’s proved to be an era of growth for the life insurance industry. Two wars went on and many people decided to insure themselves to establish a secure monetary future for their families. It is also said that after an attack on the country more people buy life insurance policies. Nobody can contest that simply because after Pearl Harbor a bunch of people panicked and decided to open policies in fear for their lives. The same is true after the turn of this century when the attacks on the World Trade Center took place. People decided that not having protection was not worth it and that a little premium each month was better than leaving their families in economic burden.

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But first of all, why is life insurance so important? Sadly, many people see it as an unnecessary expense, thinking that once they die, why will they need the money? However, life insurance provides financial protection for the loved ones you leave behind.

For example, if you died tomorrow, would your partner be able to meet the monthly mortgage repayment and day to day bills on one salary alone? Would they be able to live the same lifestyle without your salary? Or would they need to sell up and downsize, possibly uprooting your children in the process?

It is unlikely that they would be able to cope financially on just one salary alone – and nor would you want them to be put under financial stress while coping with their grief.

The positive news is that the life insurance doesn’t have to be expensive – and fixed term life insurance can be fairly cheap.

Fixed term life cover is insurance that pays out a lump sum should the life insured (ie. the policyholder) die during the term of the policy. It is a simple and probably the most inexpensive form of life insurance cover available.

This is because if the policyholder (or policyholders in the case of a joint life policy) survives the term of the policy, it expires and no payment is made. As the lump sum payment is only made on the death of the policyholder, this makes the life assurance premiums less expensive than some other life insurance plans.

Fixed term life insurance can also have additional benefits such as payment of the lump sum upon diagnosis of a terminal illness (such as cancer) during the term of the policy.

The term will normally fixed to match your personal financial circumstances – for example, if you have twenty years to go on your mortgage, then you need life insurance to cover at the least the period until your mortgage is paid off. Or you may want it to run up until you plan to retire.

As with all insurances, do shop around to find the right deal for you – you’ll be surprised how much prices can vary from insurer to insurer even though they are offering the same level of cover and benefits.

Finally, if you are unsure about any aspect of your chosen cover, then speak to your life insurance provider or seek independent financial advice.

Life cover, also known as life assurance or Missouri life insurance, can pay out a cash sum in the event of your death