Life insurance

The term life insurance covers all insurance policies that insure against biometric risks such as death or disability, as well as insurance policies that serve to provide for private old age.

Life insurance is an individual insurance policy that provides economic protection against the economic risks arising from the uncertainty of the insured person's life. "The insured event is the survival of the insured person to a certain point in time (survival event) or the death of the insured person during the insurance period (death event)."

Life insurance policies are personal insurance policies, as the insured risk lies in the person. In the life insurance contract, an insurance benefit is agreed which is paid out to the policyholder or another beneficiary in the event of an insured event. Generally, life insurance policies are concluded as a lump-sum insurance. The insurance benefit is paid as a cash benefit in the event of an insured event. The amount of the economic loss actually incurred as a result of the insured event is irrelevant.

Depending on the contractual agreement, death during a certain period (death insurance), survival at a certain point in time (endowment insurance), the occurrence of serious illnesses (dread disease insurance), occupational disability or incapacity to work, need for long-term care or other risks directly related to human life may be designated as an insured event and trigger a benefit.

Annuity insurance is also a type of life insurance. As a benefit, a regular payment is due from the life insurer, hence the name "annuity insurance".

Delimitation

Social insurance covers similar risks, but is not based on an insurance contract. The demarcation from health insurance, especially in the case of benefits in the event of occupational disability or incapacity for work, is regulated by national law. Accident insurance, which is not part of life insurance, is distinguished by the fact that it only provides benefits in the event of death or disability as a result of an accident.

History and origin

The first life insurance policies originated in ancient Rome, where "funeral societies" covered the burial costs of their members as well as providing financial support to surviving relatives. Other forerunners of modern life insurance were the tontines in 17th century France. Merchants, ship owners and so-called underwriters met at Lloyd's Coffee House, the forerunner of today's well-known Lloyd's of London insurance exchange. It was here that promises of benefits on people's lives were certainly made. Other bets on people's lives were also frequent in England. This led to the fact that later life insurance contracts could only be concluded if an economic interest in the survival of the insured could be proven.

In these "early days" of life insurance, contracts did provide for benefits in the event of the death or survival of certain persons, but this was not yet done on a systematically calculated basis, but either in the form of a pay-as-you-go system or as a kind of bet.

A historical variant of risk insurance is betting insurance. This was a business practised in England in the 18th century, but was banned as early as 1774. Two people bet on the life of a third person that he or she would still be alive at a certain point in time; the third person did not have to give his or her consent.

Edmond Halley is considered the inventor of life insurance mathematics. Modern life insurance was launched in the late 17th century. The "modern" origin is considered to be the first Society for Equitable Assurances on Lives and Survivorships, which operated with actuarially determined age-related premiums in London in 1762. Death funds were also founded on this basis in the 19th century.

Germany

In Germany, life insurance policies were sold from 1827 onwards by Gothaer Lebensversicherungsbank, the very first German life insurer - founded by Ernst-Wilhelm Arnoldi. Arnoldi, a son of the Thuringian royal seat of Gotha, is therefore also considered the father of German insurance. Gustav Hopf (1808-1872), the long-serving director of the Gothaer Lebensversicherungsbank, is in turn regarded as the "inventor" of the traditional form of German life insurance on death and survival (mixed insurance). Otto Gerstenberg, director of Victoria zu Berlin, introduced life insurance for everyone in Germany in 1892, making life insurance a popular form of insurance without regard to the social or financial situation of the insured.

After the 1st World War a Reichsheim working group was formed.

USA

The sale of life insurance also began in the United States in the late 1760s. The Presbyterian Synods in Philadelphia and in New York the Corporation for Relief of Poor and Distressed Widows and Children of Presbyterian Ministers was established in 1759; priests of the Episcopal Church organized a similar fund in 1769. Both, however, were still based on the pay-as-you-go system.

On 18 June 1583 Walter Gybbons, as the insured person, and 16 underwriters signed the first (surviving) term life insurance contract in London. Should he die within a year, the sum of 382 pounds was to be paid out to the alderman Richard Martin.

Before the American Civil War, many companies in the USA insured the lives of slaves - but the beneficiaries of any compensation were the slave owners. In 2001 and 2003, legal regulations forced life insurers to search their archives for such life insurance policies in order to satisfy any claims by descendants.