Why Life Insurance?
We all know that the founders of America were great men. But few of us know how many things we have with us were also created by them.
Franklin created the Union Fire Company in Philadelphia to help prevent catastrophes like the Philadelphia fire. Writing to the paper when he was a young man but signing as Old Man in 1735 he said:
“In the first Place, as an Ounce of Prevention is worth a Pound of Cure, I would advise 'em to take care how they suffer living Coals in a full Shovel, to be carried out of one Room into another, or up or down Stairs, unless in a Warming Pan shut; for Scraps of Fire may fall into Chinks and make no Appearance until Midnight; when your Stairs being in Flames, you may be forced, (as I once was) to leap out of your Windows, and hazard your Necks to avoid being oven-roasted.”
Translated into today’s English, he noticed that people were carrying open shovels full of hot coals up and down stairs where the embers might fall and set fires underneath the stairs. This is how the famous phrase “An ounce of prevention is worth a pound of cure.” was first printed.
Franklin's goal for insurance was to protect industrious and hardworking Americans from losing their hard earned money in one fell swoop.
The founding of the first insurance company occured when Franklin’s Union Fire Company met and decided to create an insurance fund to cover fire insurance. Later they proposed life insurance. He was particularly concerned about policies for widows and orphans that they might receive benefits to replace Pensions.
“As Franklin repeatedly stressed in letters to his son, America’s strength would be its proud middling people, a class of frugal and industrious shopkeepers and tradesmen who were assertive of their rights and proud of their status. Like many of these new Americans, Franklin chafed at authority. He was not awed by established elites. He was cheeky in his writings and rebellious in his manner. And he had imbibed the philosophy of the new Enlightenment thinkers, who believed that liberty and tolerance were the foundation for a civil society.” Smithsonian Magazine, July 31, 2003
Franklin had the view that we are greater as a group than we are when we stand apart. Insurance is basically based on this collectivist, self-governing and independent-minded principle. When you have hard times there is a larger fund to take care of you as long as you are willing to participate.
When it came to funding the war of independence from England he realized that if each family merely contributed one shilling the way could be funded and independence could be gained. It was this exact thinking that made funding the war possible. Franklin provided a typical take on how raising £1.2 million a year could be accomplished merely through more frugality. “If 500,000 families will each spend a shilling a week less,” he explained to his son-in-law, Richard Bache, “they may pay the whole sum without otherwise feeling it. Forbearing to drink tea saves three-fourths of the money, and 500,000 women doing each threepence worth of spinning or knitting in a week will pay the rest.” For his own part, Franklin forked over his postmaster’s salary in 1775.
As an insurance professional, when folks tell me they cannot afford life insurance, this great, durable concept created by our Founding Father Benjamin Franklin I am struck with sadness, for them. Whereas he would have people drink less tea, I am often in my mind questioning the weekly beer budget of these naysayers and taking a page from 1775 when great things were wrought here, wishing for them to find a greater purpose. I just know it will feel right for them if they can join the flow of giving to those who make their lives matter and providing for themselves better in the process. I know because I understand these instruments well, that there is an act of non-participation and self-negation that is taking place. Because it’s not ourselves we are denying, it’s those whom we love the most; those who give our lives meaning.
So Franklin would have people drink a little less tea --no harm, less yellow teeth maybe, and work a little harder so we could have a whole, free country. I feel like we can find a few bucks to build our own family dynasties.
That’s all. Be well. Love well.