An integral part of human civilization for the longest time is history of life insurance. It has continued to evolve and adapt to the changing needs of individuals and communities. This financial instrument has played a vital role in providing security and peace of mind to families in times of crisis.
In its essence, life insurance is a contract between a policy owner and a life insurance company. In case of demise, insurers’ families are guaranteed to be paid a sum of money in exchange for the premiums paid by the policyholder during their lifetime.
But what actually is life insurance, and how exactly does the history of life insurance impact us?
Let’s find out.
What is History Of Life Insurance?
As we’ve already discussed, life insurance, at its core, is a contract between an individual and an insurance company. We, the policyholders, have to pay regular premiums to the insurer in exchange for a sum of money that is known as a “death benefit.” The death benefit is paid out to the designated beneficiaries upon the unfortunate death of the policyholder. As long as life insurance has existed, its primary purpose is to provide financial protection and support to the policyholder’s family in the event of their untimely demise.
There are various forms of life insurance, with each designed to meet different needs and preferences. The two main categories of life insurance are:
History Of Life Insurance Terms
Term life insurance offers a death benefit without any cash value accumulation, covering a specified term such as 10, 20, or 30 years. It is observed to generally be more affordable than permanent life insurance.
Permanent Life Insurance
This category of life insurance accumulates a cash value over time that can be accessed or borrowed. It provides coverage for the entire lifetime of the policyholder, including subtypes such as whole life, universal life, and variable life insurance.
Why Life Insurance Matters
As far as the history of life insurance goes, it has been serving as a financial safety net that ensures that you are protected financially in the event of your passing. The death benefit can cover any outstanding debts and funeral expenses and also provide income replacement for your dependents.
If you are a business owner, you can use life insurance to safeguard your enterprises, which will ensure a smooth transition in case of a partner’s demise. Buy-sell agreements can also be funded by your life insurance, allowing business partners to buy out a deceased partner’s share.
In this way, there are many other benefits that make life insurance matter for all of us.
History Of Life Insurance in the Sub-Continent
The history of life insurance in the sub-continent is as diverse as the cultures present within the region. In fact, the roots of life insurance in India can be traced back to ancient times when communities used to engage in informal risk-sharing arrangements. With time, however, these practices evolved, and the concept of modern life insurance took hold during the British colonial period.
In 1818, The Oriental Life Insurance Company was established. It is considered the first life insurance company in India and marked the beginning of a whole new era as other companies followed suit and began providing life insurance products that catered to the needs of an emerging middle class.
This is the history of life insurance in India, and soon, the industry saw a boom. By the early 20th century, several indigenous life insurance companies had emerged – reflecting the increasing awareness of the importance of financial protection.
Challenges and Opportunities
Although the subcontinent witnessed a surge in the history of life insurance, awareness, and adoption, challenges persisted. Due to misconceptions and lack of awareness, some segments of the population remained underinsured. Collaborative efforts were required from insurance providers, government, and other education programs to counter and address these issues.
The socio-cultural fabric of the region also emphasized the importance of fulfilling responsibilities towards elderly parents and providing for the education and well-being of children. In this context, life insurance became a useful tool for responsible financial planning.
These challenges also provided opportunities for insurance companies to leverage technology and distribute to a wider audience – ensuring that life insurance is made more accessible and convenient for the diverse population of the subcontinent.
Khuda Buksh and the Evolution of Life Insurance in the Subcontinent
The history of life insurance cannot be completed without the legendary name of Khuda Buksh, who stands tall as a pioneer, shaping the landscape in the Asian subcontinent. Khuda Bush’s story, as chronicled in ‘Khuda Buksh: The Pioneer of Life Insurance in Bangladesh,’ sheds light on his resilience and provides insight into how he laid the foundation for a crucial aspect of financial security for millions.
Born in the mid-19th century in what is now Bangladesh, Khuda Buksh witnessed an era filled with economic and social transformations. During this time, the subcontinent was still under British colonial rule; the impact of industrialization and modernization gradually affected society.
The history of life insurance in the subcontinent bears witness to how Khuda Buksh recognized a fundamental need that resonates with the essence of social welfare – the need for financial protection for families in times of uncertainty. His vision soon led him to introduce the world of life insurance into the region, although it was a relatively unfamiliar concept at the time.
Khuda Buksh’s Advocacy
Yes, Khuda Buksh faced numerous challenges in popularizing the concept of life insurance, and the prevailing socio-economic conditions made his mission even harder. However, his relentless efforts and the establishment of the Khuda Buksh Oriental Public Library soon bore fruit, and more people began to recognize the importance of securing the future of their loved ones.
Legacy and Continued Relevance
Khuda Buksh’s contribution to the development of life insurance in the subcontinent reminds us of the spirit need in those who dare to envision a better tomorrow. His pioneering efforts left an enduring mark on the region’s financial landscape, shedding light on the fact that even in challenging times, a single person’s vision can sow the seeds of positive change, helping generations to come.
‘Khuda Buksh: The Pioneer of Life Insurance in Bangladesh,’ is a book by his son, Author Muhammad Obaidur Rahim. It sheds light on how Buksh worked tirelessly to establish a life insurance business while overcoming religious and cultural prejudices against the industry.
If you are interested in learning more about life insurance policy, reading Khuda Buksh: The Pioneer of Life Insurance in Bangladesh will help you gain insights into the evolution of the industry in the subcontinent. Through this exploration, you can reflect on the evolution of life insurance and gain an appreciation for legends like Khuda Buksh, whose contributions have left an enduring imprint on the landscape of financial services.
