History of Life Insurance
Life insurance is made to ensure that no financial hardships occur in the family after the death of the person. It is a contract between the policy holder and the insurer in which the latter pays premium for specific periods which may be for life and get cash benefits after the period or after his/her death.
The concept of insurance first started in China, when people scared of the sea pirates used to carry their goods in more than one ship so if one is being pirated then their total cargo is not lost. This was a preventative measure against theft or any kind of loss. Another policy had started in Babylonia around 4500 years ago when traders used to bear the risk of the trade and used to get the returns if the goods arrived safely along with the interests. The new concept of insurance started spreading its reach and later in 2100 B.C. the practice was made legal in which three things were considered- the loan on the vessel, the interest rate and a surcharge for the possibility of loss. After considering these three things the insurance was calculated and people did not mind since there was safety for their goods which though it came at a price but was nothing compared to the loss that the company would have to bear on the theft of these goods.
Study reveals that the concept of “community insurance” was practiced in the 1000 BC which was practiced by the Aryans and thus the concept was set up and slowly it started spreading in all parts of the world. In many parts the concept was used to help the family of widows and children who lost their family. There were many burial societies formed and many other societies keeping different norms for the customers. Life insurance has spread to such an extent that today more or less every person has their life insurance policy in place. A good thing to do would be to invest in a policy if you don’t have one already, the amount of the premium would definitely depend on your family status.
Many people feel that the life insurance is expenditure for the families but if long term benefits are considered then it is the utmost important thing for a human’s life.