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Education Centre History of Life Insurance | History of Life Insurance |
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The need to protect against loss is probably as old as human society and humans as a society have been helping each other since ancient times. Ancient Chinese merchants when traveling in areas of danger, redistributed there goods across many vessels so as to limit the loss in case of a boat capsizing.
The earliest Insurance system Historical records of the Code of Hammurabi c1750 BC suggest an early insurance system developed by Babylonians which was granted legal status. This therefore is perhaps the earliest evidence of formal Insurance. Insurance was also evident in ancient Iran where in gifts to the monarch where registered and when the gifts by individual equaled or exceeded 10,000 Derrik he was eligible to withdraw twice the amount from the royal treasury in times of need like construction of house, getting children married, or in any other natural calamity. The Chinese merchant system was further refined around 750 BC by the concept of “general average” by the inhabitants of Rhodes. All the merchants whose goods were sea bound together paid an extra divided premium in proportion to the total value of their goods. This amount thus collected served to reimburse the losses of a trader/s whose goods drowned in case of a storm or pirate attack. So all initial Insurance practices were focused on limiting loss of goods to the traders and merchants. Life Insurance and Health Insurance However the concept of Life Insurance and Health Insurance was brought into effect by Romans in around 600 AD. They had “benevolent societies” which took care of families and paid funeral expenses upon death of a family member. On the same lines of “benevolent societies” were “friendly societies” in England which contributed money and used it in times of any emergency. As England rose to become a maritime superpower, ship owners, captains, and merchants frequented Mr. Edward Lloyds coffee house for genuine news and meeting place for parties interested in insurance of their cargo. The coffee house though shifted from it’s original location continued to be as popular and is today known as Lloyd’s of London where individuals and corporations meet and pool resources to spread risk. It is interesting to note that Lloyd’s of London is still NOT an Insurance company. The first Insurance Company “The Fire Office” to insure residential dwelling units against fire was opened by Nicholas Barbon in 1680 in the aftermath of the Great Fire of London. During the Industrial Revolution, Benjamin Franklin worked a lot to popularize the concept of Insurance against Fire and in 1752 formed “Philadelphia Contributionship for the Insurance of Houses from Loss by Fire” Modern Health Insurance The first early modern concept of Health Insurance did not come up until 1694 by Hugh the elder Chamberlen. “Accident Insurance” came into being in the late 19th Century in US courtesy the Franklin Health Assurance Company of Massachusetts. It offered insurance against injuries incurred from steamboat, rail and road accidents. Hospital and Medical expense policies were introduced in first half of 20th Century. However, this functioned more like a “disability insurance” which in late 20th Century evolved as modern health Insurance programs. Life Insurance in 21st Century Getting a Life Insurance today has got simpler to buy. Prospective Insurer can surf the web, educate himself about the various types of Insurance programs available, compare and contrast the deals offered by various companies, calculate his premium and buy what is thinks is the best for himself at the click of a mouse. With so many companies around offering tailor made Insurance solutions to fit everyone’s need, Insurer sure has the power to make an informed choice. |
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