I have been in the health and life insurance business for over two decades. I have sat in bars with some old life insurance agents that with enough cocktails, will tell you they wrote the first life insurance policy. However, life insurance does go back a few hundred years even before some of the older life insurance agents hanging around today were ever thought about being born. Let’s take a look at the history and growth of the life insurance industry.
An investigative reporter by the name of Ronald Kessler set out to answer this question. He wrote a book called The Life Insurance Game back in 1985. He did discover definitive information that the oldest life insurance policy can be traced back to London in 1583. The insured was a gentleman by the name of William Gybbon. Mr. Gybbon worked in London as a Salter of meat and fish used to preserve the meat. The company underwriting the plan was not clear, but the beneficiary was known to be Richard Martin. No one really knows their relationship or the face amount of the policy other than it was a one year term, but it is an interesting story. William Gybbons actually died near the end of the policy year. The underwriting company refused to pay the claim on the grounds that the contract was for a lunar year versus a calendar year. The courts ruled in favor of Richard Martin and the claim was paid. So, even 430 years ago insurance companies were playing the loophole card.
Since then, the life insurance industry has grown and flourished into a $4.8 trillion industry in the US alone. According to the American Council of Life Insurers, 20% of the world’s life insurance premiums originate in the US. It is estimated that there is over $18.4 trillion of life insurance in force in the US alone. That is actually larger than the US debt of $16.7 trillion. Premiums collected eclipse $530 billion with net earnings north of $130 billion per year. The life insurance industry employs approximately 2.5 million workers and agents directly and indirectly. Today just in the US there are over 1,000 life insurance companies. The largest in the US is MetLife with about 10% market share, followed by AFLAC with 7% market share of life insurance and third is Prudential with 6% market share. Life insurance companies invest a staggering 33% of the American economy making them one of the largest sources of investment capital in the United States. If you think that life insurance doesn’t pay out, consider that the industry pays $1.5 billion per day in death claims, annuities, disability, long term care and retirement withdrawals. It is estimated that 75 million families or 67% of US households depend on life insurance for their financial and retirement security. The United States would be in peril without the life insurance industry and what it has became today. It is an interesting evolution over the past 430 years from the death of a London Salter to a $4.8 trillion industry in the United States alone.
We urge you to contact a local life insurance professional today and have your policies reviewed by an experience professional. Your loved ones will thank you for taking care of them when you are gone one day.
“The hour of departure has arrived, and we go our separate ways, I to die, and you to live. Which of these two is better only God knows.” ― Socrates
Image courtesy of David Castillo Dominici at FreeDigitalPhotos.net
Tim Wilhoit is owner/principal of Your Friend 4 Life Insurance Agency in Nashville, TN. He is a family man, father of 3, entrepreneur, insurance agent, life insurance broker, salesman, sales trainer, recruiter, public speaker, blogger and team leader with over 26 years of experience in sales and marketing in the insurance and beverage industries.
Tim – As always, thanks for the valuable input!
Thank you Phil. With September being LIAM, it was a question that popped into my head. After doing the research, I thought it was an interesting story to be told. Thank you for the encouragement.
information on the oldest policy for which we have surviving evidence.
The year of this oldest policy was 1583. The person insured was one William Gybbon. Mr. Gybbon was a citizen of London. He worked as a salter, meaning that he salted meat and fish for preservation.
The beneficiary of this policy Richard Martin, and the relationship between the men was unknown. The policy was written as a one-year term. As chance would have it, Mr. Gybbon died just before the end of the year.
The underwriters refused to pay Martin on the grounds that the contract was for a lunar year. This went to the courts. The courts ruled in favor of Martin, and he was indeed paid.
Ref: the world wide web, aint it great!
Thank you Michael or you could have just read the blog. You are correct about the beauty of the internet. Sure as hell bets my school library and using the dewey decimal system.
Tim- I am not sure about your information but it sounds very possible and was interesting. I love history. According to historical accounts the first Life Insurance Company was organized by the Presbyterian Church for the benefit of Widows and Orphans of ministers in 1717. It was Chartered by sons of William Penn in 1759. It was interesting that in all of its history until it was merged with another company by the sate of Pennsylvania in the late 1900’s that it never challenged a claim in its history. There was always an argument about the oldest company because Sun Life was organized and chartered in 1721. I had never heard of the other story and it was very interesting. I entered the Life Insurance Industry with Prudential in 1957 and still write insurance today. I just published the second edition of “The Prophets Dollar” and it is on Amazon. If you and your staff believe in carefully planned and executed lifetime programs I think you would like the book. Allen D. “Al” Mitchell, Ph.D., CLU, FLMI
Allen, you point out some interesting facts as well. I have to assume Kessler’s research was creditble. In honor of LIAM, it was just a question that came to mind. The more I dug, the more interesting it became. There were alot of facts ommitted like the name of the company. There are suggestions, without proof that life insurance is even hundreds of years older than that in it’s primative form. I guess we may never know. I really appreciate your sharing and the recommendation of your book. I will check it out.
Interesting!
Your message
Thank you for such an interesting and valuable input.
God
I have always been excited about the insurance business and have taught at the college level on the subject and it is always a thrill to find more information. I certainly would not bypass what you found but rather revel in it as history of humankind learning to protect one another. In the class I used to discuss how the early Chinese merchants would divide their goods for shipment on several boats rather than one to lessen the possibility of loss. When persons are against insurance they usually have closed their minds to the facts of life that exist all about them. I was amazed at the number of people in the recent Oklahoma tornadoes that did not have home insurance.
Sometimes education and learning can reach beyond our own lives and being and teach those who are coming up why persons of wisdom have done certain things. I like to go back and re-read Proverbs now and then to remind me what would happen if each generation would listen to the last generation for wisdom and knowledge.
Good luck as you educate and sell the present generation. Allen
Tim – thank you for the interesting historical information about life insurance. Much appreciated.
Interesting article. One could plausibly say that the concept of “life insurance” is thousands of years old – see fraternal obligations in the Old Testament as an example.
Matthew, I can’t disagree however my research lead me to Kesslers research and the 1583 case was the earliest recorded. I do appreciate your input.
Good one Tim, I’ve heard that insurance as we know it, was an evolution of the the world traders of goods who used to put up money when they sent their ships to sea. Generally it is said the pirates were the reason, so these gentlemen put up a pool of money that was to offset the loss of a ship to pirates. Ultimately they sent out decoy ships so the pirates were more likely to get the ship that had no booty.
It is said that these gentlemen actually became Lloyds of London, the first organized insurance company, but we have no witnesses.
Agree Phil.. heard the same story.
Phil, I too have heard that story. I guess insurance started with P&C and evolved to life and then health, supplemental, etc. Thank you for sharing.
Perhaps we’ll never know for sure, that’s why we need to keep discussing so that people 300 years from now people will be able to find the origin or the evolution to what will become. Take VFG for example, the first 100% virtual insurance agency. So like those good old boy’s who sat around the pub stating that “By God we have invented the ultimate, this as big as insurance will ever get”. Wrong again and we will probably succumb to a program where you tune in a dream for learning about inurances and you wake up its all placed and approved, who knows. I am happy to be involved in virtual for now.
Phil, I love the “dream” insurance policy. I have met agents that work like that. They dream of writing a lot of policies, but forget to do the necessary work while they are awake, LOL!
Isn’t that the truth. We are on a webinar last night and someone asked when the lead program would start? The President answered by sending him the 4 page memory jogger and said; “We are going to be a warm market company, you know, the old fashioned way, your warm market, your clients warm market and so on”.
Benjamin Franklin opened the first insurance business in the continental US. He sold the first “fire” policy in US. The first insurance was sold in London for traders. Some say Persians and others argue Greeks were the first to use the concept. (I wrote an article on this some time back)
Jim, I have heard that interesting fact as well. I also know that historians argue about the validity of Franklin’s inventions and discoveries because he owned the printing press and wrote the majority of the news or documentation. Some believe he stole some people’s ideas and reported them as his own. Thank you for sharing.
Needless to say, the advertisers and publishers don’t see the same CPC
– the advertising networks will take its own stake in the middle.
Mentioned before with all the benefits of internet marketing, people still buy magazines, billboards went out to check to see their
mail, watch TV, and shopping. Getting traffic on your business’s website will draw in more and
more customers, so understanding how to do this is key for an effective online marketing strategy.
Great story worth going through. Regards