A Short History of Life Insurance

introduction Life insurance or life assurance is a contract between the policy owner (insured and the insurer, (insurance company) where the insurer agrees to pay a sum of money stipulated in the contract at the time of the insured's death.

The payment sum usually goes to the agreed beneficiaries in the event of the policy holder's death. The beneficiaries are usually stipulated when the insurance is purchased but can be changed by the policy holder at any time before his/hers death. The stated sum is usually at least one hundred thousand dollars for your typical policy. The amount can be increased but the premiums also increases. Another way to increase the sum is to have multiple life insurance policies for one policy holder.

The first know form of insurance appeared in China as early as 5000 BC. It was a way for traders and merchant to reduce their losses in the event their cargo was stolen or destroyed. The first know form of Life Insurance began in ancient Rome. They were called burial clubs and they covered the cost of member's funeral expense and help the members surviving family out monetarily.

Modern life insurance began in the late 17th century England as a replacement for traders insurance. In US, it was 1970s when the first modern life insurance plans began. The Presbyterian Church in New York and Philadelphia created the Corporation for Relief of Poor and Distressed Widows and Children of Presbyterian Ministers in 1759. This was created under the Christian doctrine that it is the responsibility of the Church to help the poor, needy, and widowed. Later the Episcopalian priests created a similar fund in 1769. From 1787 to 1837 over a dozen life insurance companies sprang into being, but less then half survived that century.

Before the American Civil War plantation owners could insure the lives of their slaves against suddenly or unnatural death. Injures and other disabililities could also be insured. The plantation owner would be paid a sum if said slave died or was rendered incapable of working. This abominable practice was done because slaves were seen as property, not as human beings. The sale of these policies ended fifteen year before the Emancipation Proclamation was passed.

In the 21st century all insurance companies sell some form of life insurance. It is the number one form of insurance purchased worldwide. Much of it is sold to people after they have children in hopes that in the event of an early and sudden death the sum paid to the policy holder's beneficiaries will be able to use the money to bury their loved ones and support them economically