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From the earliest days, Man has organized himself to control three main hazards, which confronted him, and still do. These hazards are: • DYING TOO SOON • LIVING TOO LONG • BECOMING DISABLED
Life Insurance originated and developed to reduce the impact of these hazards by grouping together with others and thus sharing the risk. The story of the origin of life insurance is very inspiring. The idea of guarding against risk is almost as old as mankind. We know that Joseph recommended storing grain during seven fat years in Egypt against the impending seven lean years.
Centuries ago in England, little groups banded together into guilds and societies. Members of these guilds and societies by paying small sums were assured that a certain measure of relief would be given to their families if the breadwinner were taken away. In 1705, “The Amicable Society for a Perpetual Assistance Office” was founded and it became England’s first successful Life Insurance Company. One of the first records of life insurance was in Rome.
The groups called Fratres (burial clubs) came together. These were set up by the poor to pay for the funerals of the members and to help the surviving family members financially.
The middle ages had guilds for the various types of highly skilled labor. There are accounts that show that these guilds helped their members with various types of insurance including life insurance and disability insurance. Life insurance came into its own in England in the late1600’s and became popular from that time on.
During this time period Lloyd’s of London was growing. Lloyd’s whose name came from Lloyd’s Coffee House where insurance was transacted by ship-owners with the underwriters (backers) who met to put together insurance contracts and other shipping and merchant related business.
Some people think of insurance as gambling. It really isn’t gambling even though it has the similarities of probability and odds. Insurance serves a public good of sharing the financial risks of existence and life and death among many to serve those who have experienced a loss. The first life insurance company in the United States started in 1735. This company was started for the benefit of Presbyterian ministers’ families. The mutual life insurance companies originally dominated the life insurance.
These are life insurance companies that are owned by the policyholders and thus those policy-owners receive their pro-rata share of the company’s profits. There are also stock life insurance companies where the profits are made for the benefit of the stockholders. Similar to the mutual life insurance companies are fraternal life insurance companies, which were started by the various fraternal orders to assist their members. Today the insurance business has evolved to a multi-faceted business with various programs and numerous distribution methods.
The internet and the insurance industry is in its infancy with most insurance companies having a web site and now with web sites able to do life insurance. There are choices today that differ greatly from the choices of even a few years ago. The Internet has made information on life insurance accessible just as any subject. But you still need the right knowledge. That may come from a qualified insurance agent who knows their business or from a great life insurance or disability insurance web site that provides great information for you to study.
Life Insurance as we know today, developed from these small beginnings into a gigantic industry, which gives people the security they need to maintain financial soundness, morale, and faith. Through war, inflation, deflation, depression, boom, panic, epidemic, and all kinds of catastrophes, life insurance gives the individual the solid financial footing needed to forge ahead as it is based on sound and scientific principles. Any other financial institution cannot approach its record of service.
At the times when Banks failed by the hundreds and the investment companies went under, the Life Insurance Companies paid their dues in full and survived the turmoil. Life Insurance Companies have maintained an enviable record in the face of almost every conceivable trial. Life Insurance is truly INCOME INSURANCE; a new source of income replacing the earning power of the breadwinner if unfortunately he is taken away. It is in a sense, TIME, because it is money a person did not have time to accumulate; an estate that will complete the plans there was not time to finish.
Life Insurance is sold not because someone may die, but because someone must live. If people die, the contracts, which the life insurance agent has sold, are LIFE for the survivors. If people live, the contracts are life for their old age. While people live, their contracts assure effective thrift and accumulation of funds and reserves for emergencies and for opportunities. It is an unsurpassed vehicle of savings; protection and growth, which has stood the test of time and given people the security they need to maintain financial soundness and peace of mind.
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