This Day in the Law
January 11

Life Insurance Company Incorporates for First Time in Philadelphia (1759)

On January 11, 1759, the first life insurance company in American history incorporated into business. While the idea of "insurance" was not a new concept, no one had really entertained the idea of life insurance. For example, insurance was used by the Romans and other ancient cultures to guard against disasters and misfortunes like fires, sunken ships, lost traders, etc. But no one up until this time really considered the possibility of life insurance.

Around 1716, a group called the Presbyterian Synod of Philadelphia created a charitable organization titled the "Fund for Pious Uses" to assist local Presbyterian ministers with various issues. Over time, the Presbyterian Synod saw a need to offer life insurance for the Presbyterian ministers and their families that it assisted. So, the organization requested a charter from its state Governor and became America’s very first incorporated life insurance company on January 11, 1759. The Synod named the company, "The Corporation for Relief of Poor and Distressed Presbyterian Ministers and of the Poor and Distressed Widows and Children of Presbyterian Ministers" – yeah, that’s quite a long name!

In 1888, the company changed its name to the Presbyterian Ministers' Fund ("PMF"), and even began offering life insurance to non-minister laymen. The idea to offer life insurance to laymen was a completely novel concept – and an idea that did not take hold for over another hundred years.

PMF did face many challenges, including a lack of interest from individuals to sign up for life insurance. Most people in those days chose only to use insurance like fire, marine, and merchant insurance, while few used life insurance.

Even through the tough times, PMF continued to operate and existed for over two hundred years. PMF was finally taken over in the early 1990s by Provident Mutual Life Insurance Company, which was then acquired by Nationwide Mutual Insurance Company in 2002.

Life insurance is based primarily in contract law. In other words, the individual policy owner signs a contract with the life insurance company. The terms and conditions of the life insurance policy are spelled out in the contract.

Today, life insurance is also an entire industry in and of itself. Life insurance companies offer nearly as many different types of life insurance policies and related services as ice cream options from Ben & Jerry’s. For example, you can purchase temporary or permanent life insurance, and subclasses of insurance, including term life, universal life, whole life, and endowment life insurance (to name a few).

The original members of the Synod may not have thought of all these different types of life insurance policies when they incorporated on January 11, 1759, but they did realize a key concept – that every human being should be entitled to some form of life insurance.

The Political Economy of Regulation: The Case of Insurance (1988), by Kenneth J. Meier
The American Economy: A Historical Encyclopedia, Volume 2 (2003), by Cynthia Clark Northrup