What If You Were the Prime Inventor?

If you were the Prime Inventor of the Earth, would you invent life insurance? What if it hadn’t existed already. Would you go ahead and create it? Let’s think about that for a second. What exactly is life insurance? What societal problem does it solve? Is it the best way to solve that problem?

Here you have a product that people buy on an individual basis. The price they pay is determined by their specific mortality risk. The rate is based on their own unique combination of age, gender, current health, medical history, family medical history, vocation, avocation, lifestyle, and other factors. That is a pretty fair way of doing things.

Of course, their mortality risk is assessed in comparison to other people who pose similar risks. That helps actuaries come up with approximations of when death might occur. Obviously, no one has a crystal ball, but centuries of data help in the formulation of some pretty accurate predictions. Seems pretty reasonable.

We are talking about big, big business here. Trillions of dollars are collected in premium and invested conservatively. This means that even if the mortality projections are off, and many claims have to be paid earlier than anticipated, enough money is on reserve to fulfill all obligations. This is a sensible approach to handling money.

Over many years, millions upon millions of insureds have passed away. Their beneficiaries have received the money they needed when they needed it. These people, both as the families of the insureds, the businesses of the insured, and the charitable heirs of the insureds, have been located on all the continents of the planet. Life insurance has been providing financial security for the global village we humans have become.

Back in tribal days, we didn’t need such a product. When mom or dad died, the tribe took care of the family. People needed to stay close to the tribe for this reason. They needed to be with people who could provide for them. In this way, they remained dependent on the tribe.

Then, along came the money economy. With some coin in the pocket, a man or woman could buy what was needed. They could go to the next village, the next region, or even the next country and do business. They would certainly still need their tribe for religious, cultural, and social connections; but economically, they were much more of a free agent. When they lost a provider, they didn’t automatically have to become dependent. If they had money, they could still be their own person.

In this way, a life insurance benefit helps people retain their independence. They don’t have to become dependent or indebted to anyone else. This financial independence is key to their growth as a human being. They can become the individual they were meant to be because they are not beholden to the dictates of someone who pays their way.

If I was the Prime Inventor, that would be my number one priority. I wouldn’t change a thing.