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Life insurance – a historic document

A life insurance policy is very often a document that will endure the passage of a substantial amount of time. People take out insurances that will benefit their loved ones sometimes decades in advance, but such precautionary measures and the idea behind making provisions for the future, even for a future generation, is not a new one. People have always been concerned about the time after their passing and what will happen with the people they care about, once they are gone. Long before you policy becomes a truly historic document, the documents of the past speak about life insurance origins and how this particular kind of product came to be.

Archeologists were able to track down historical proof of the existence of insurances back to times of ancient China and Babylon, up to two thousand years B.C. Traders, who not only travelled a lot, but also were known as wealthy people and therewith potential targets, started with insurance funds to make sure the losses suffered by such an unfortunate event would not ruin the complete business. The actual life insurance variant could be traced back to ancient Rome. The Romans, which can be blamed for many useful and less useful inventions, also invented funds for members of the so-called “burial clubs”. People who were members had their burial costs covered and the surviving members of the family were assisted by the members of the club financially.

Despite some incidental occurrences of similar insurances over years, including the Tontines in France, the real life insurance did not get invented until the 17th Century England, where Lloyd’s Coffee House as the focal point where such deals were made, in time became the famous Lloyd’s of London, insurance company. People of trade, owners of ships, merchants, traders, and similar figured out a way of assuring their business interests with what was basically a life insurance. The first company to go on and sell real life insurance to civilians was the London based Amicable Society for a Perpetual Assurance Office, which is now generally considered to be the first life insurance company ever.
The life insurance idea got picked up all over the modern world, with Germany being one of the largest supporters of life insurances, even in the 19th Century establishing some of the fundamentals of the modern life insurance, like the “mixed insurance” model, where the life insurance is not only meant for the surviving beneficiaries, but if the insured person managed to survive to a certain age, he could be the beneficiary himself as well, which is the currently most favored form of life insurance in Germany still.

The United States introduced life insurances in the second part of the 18th Century, where it was initially ran by the Presbyterians, for their Priests and their widows as beneficiaries, but later expanded to include all common folk, including some very controversial life insurance for slaves, where the owner was compensated for the loss of a slave. To date, life insurances are most common in developed countries, with EU being the current leader and USA following close by. Interestingly enough, in China nowadays life insurance was up until recently as good as unknown.