INTRODUCTION
Definition of Life Insurance: A protection against the loss of income that would result if the insured passed away. The named beneficiary receives the proceeds and is thereby safeguarded from the financial impact of the death of the insured.
Investopedia explains 'Life Insurance'
The goal of life insurance is to provide a measure of financial security for your family after you die. So, before purchasing a life insurance policy, you should consider your financial situation and the standard of living you want to maintain for your dependents or survivors. For example, who will be responsible for your funeral costs and final medical bills? Would your family have to relocate? Will there be adequate funds for future or ongoing expenses such as daycare, mortgage payments and college? It is prudent to re-evaluate your life insurance policies annually or when you experience a major life event like marriage, divorce, the birth or adoption of a child, or purchase of a major item such as a house or business.
A BRIEF HISTORY
Did you know that life insurance has been around since the days of ancient Rome? Or that Lloyd's of London got its start as a coffee spot for sailors?
100 B.C.
The origins of the concept of life insurance, as we know it, can be traced to ancient Rome. Caius Marius, a Roman military leader, created a burial club among his troops, so in the event of the unexpected death of a club member, other members would pay for the funeral expenses.
1688
Edward Lloyd’s Coffee House, a small shop on London’ Tower Street and a popular gathering place for ship captains, ship owners and merchants, becomes the go-to place for shipping news and, eventually, marine insurance. It was there that the modern concept of an insurance company came into being.
In 1769, a group of professional underwriters broke off to establish New Lloyd’s Coffee House, which would eventually grow up into Lloyd’s of London.
1759
The Presbyterian Synod of Philadelphia sponsored the first life insurance corporation in America for the benefit of Presbyterian ministers and their dependents. Episcopalian ministers organized a similar fund a decade later.
Not content with the titles of statesman, scientist, inventor or author, Benjamin Franklin added insurer to his collection. Franklin was also instrumental in getting the first life insurance company, the Presbyterian Ministers' Fund, off the ground.
(The first insurance company in the American colonies was formed before this, in Charleston, S.C., in 1735, but it offered only fire insurance at first. It didn’t add life insurance until 1760.)
1875
In 1875, the Widows and Orphans Friendly Society was founded in Newark, N.J. with a single product: burial insurance. It was the first company in the United States to make life insurance available to the working class.
1930
Life insurance sales rose dramatically after World War I, peaking at $117 billion of insurance in force in 1930. By the eve of the Great Depression, there were more than 120 million life insurance policies — equivalent to one policy for every man, woman and child living in the United States at the time.
1976
The end of World War II and the economic boom that followed boosted sales of life insurance in the United States. By the mid-1970s, 72 percent of the adult population of the United States and more than 90 percent of all husband and wife families owned some form of life insurance.
2001
A total of 2,977 people perished in the Sept. 11 terrorist attacks in New York, Washington, D.C., and Pennsylvania. The Insurance Information Institute estimates $1.2 billion was paid out in life insurance claims.
2010
LIMRA’s 2010 Life Insurance Ownership Study found that 30 percent of U.S. households (35 million) had no life insurance protection at all, and only 44 percent of U.S. households had individual life insurance, marking a 50-year low for the life insurance industry.
Subsequent studies in the years since 2010 have revealed that the gap has not improved.
