Key Terms:


  • Insured

    The person who the life insurance protection is on.

  • Beneficiary

    The person or people who will receive the benefit amount if the insured were to die.

  • Policy Owner

    The person who owns the life insurance policy. This can be the insured, the beneficiary, or a third party like a trust.

  • Life Insurance Company

    The companies which issue life insurance policies.

  • Policy

    The contract between the policy owner and the insurance company which lays out the terms of the agreement.

  • In Force

    Your policy is active and you are now covered.

  • Face Amount

    The amount of money paid to the beneficiary if the insured were to die. Also, know as the benefit amount or death benefit.

  • Premium Payment

    The amount of money paid by the policy owner to the insurance company to keep the policy in force.



Life Insurance 101


History of Life Insurance

100 BC - Roman military leader, Caius Marius, created a burial club among his troops so that when his soldiers died unexpectedly, other members would pay for burial expenses. Similar clubs started, eventually leading to clubs paying stipends to the deceased surviving family members.

1653 - Italian banker, Lorenzo de Tonti, creates the Tontine annuity system in Paris, France. Investors would pay a sum of money into the annuity. Each investor then received an annual dividend paid out on his capital. As each investor died, his or her share would be divided among the surviving investors and paid out as higher dividends. The annual payments continued until there was only one survivor left.

1662 - John Graunt finds predictable patterns of longevity and death in certain groups of people.

1693 - Edmond Halley creates the first mortality table linking life insurance premiums with the average life spans of certain groups of people.

1706 - In London, William Talbot and Sir Thomas Allen create Amicable Society for Perpetual Assurance, the first Life Insurance Company. Amicable Society started with 2000 members, and their first policy had an age range from 12 - 55.

1759 - The first life insurance company was created in the United States. The Corporation for Relief of Poor and Distressed Widows and Children of Presbyterian Ministers was created in Philadelphia and New York City.

Today - There are over 2000 Life Insurance Companies, over 290,000,000 (290 million) policies in-force with over $10,000,000,000,000 ($10 Trillion) in protection, the insurance companies bring in over $124,000,000,000 ($124 Billion) in premiums, and have over $1,000,000,000 ($1 Trillion) in reserves to pay out on benefits.

Key Terms:


  • Insured

    The person who the life insurance protection is on.

  • Beneficiary

    The person or people who will receive the benefit amount if the insured were to die.

  • Policy Owner

    The person who owns the life insurance policy. This can be the insured, the beneficiary, or a third party like a trust.

  • Life Insurance Company

    The companies which issue life insurance policies.

  • Policy

    The contract between the policy owner and the insurance company which lays out the terms of the agreement.

  • In Force

    Your policy is active and you are now covered.

  • Face Amount

    The amount of money paid to the beneficiary if the insured were to die. Also, know as the benefit amount or death benefit.

  • Premium Payment

    The amount of money paid by the policy owner to the insurance company to keep the policy in force.