Life insurance is a vital financial tool that can protect your loved ones from the uncertainties of life. But do you know how it originated and evolved over time? In this blog post, we will explore the fascinating history of life insurance, from ancient times to modern days.
History of Insurance
The earliest forms of life insurance can be traced back to ancient Greece and Rome, where benevolent societies and burial clubs provided basic forms of health and life insurance to their members. The first known life insurance policy in England was issued in 1583, but it was not until the 18th century that life insurance became more widespread and sophisticated. The first company to offer modern life insurance was the Amicable Society for a Perpetual Assurance Office, founded in London in 1706. It used actuarial tables to calculate premiums based on age and mortality rates.
The history of life insurance in India also dates back to ancient times, when texts like Manusmriti, Dharmasastra and Arthasastra discussed the importance of pooling financial resources for collective welfare. The first life insurance company in India was the Oriental Life Insurance Company, established in Calcutta in 1818. However, it failed to survive and closed down in 1834. Several other Indian and foreign companies entered the market in the 19th and early 20th centuries, but they faced stiff competition and regulation. The Indian Life Assurance Companies Act, 1912, was the first legislation to regulate the life business in India.
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| Insurance Through the Ages |
Mordern Concept of Insurance
In India the principle of life insurance was reflected in the institution of the joint-family system in India, which was one of the best forms of life insurance down the ages. Sorrows and losses were shared by various family members in the event of the unfortunate demise of a member, as a result of which each member of the family continued to feel secure.
The break-up of the joint family system and emergence of the nuclear family in the modern era, coupled with the stress of daily life has made it necessary to evolve alternative systems for security. This highlights the importance of life insurance to an individual.
- Lloyds: The origins of modern commercial insurance business as practiced today can be traced to Lloyd's Coffee House in London. Traders, who used to gather there, would agree to share the losses, to their goods being carried by ships, due to perils of the sea. Such losses used to occur because of maritime perils, such as pirates robbing on the high seas, or bad sea weather spoiling the goods or sinking of the ship due to perils of the sea.
- Amicable Society for a Perpetual Assurance founded in 1706 in London is considered to be the first life insurance company in the world.
The evolution of life insurance continued in the 20th and 21st centuries, with new products, features and technologies emerging to meet the changing needs and preferences of customers. Life insurance today offers not only protection but also savings, investment and tax benefits. It is also more accessible and affordable than ever before, thanks to online platforms and digital tools. Life insurance is now a global industry, with millions of customers and billions of dollars in premiums.
Life insurance has come a long way from its humble origins. It is a testament to the human spirit of innovation and cooperation. It is also a reflection of the value we place on our lives and those of our loved ones. As we celebrate the rich history of life insurance, let us also appreciate its present and future potential.