Did people take out big insurance policies in the late 40's?

Question

We found an unclaimed insurance policy under my grandmother that her father took out on her in 1948 or 49, or somewhere around there. We're still waiting to hear back about the amount, but I'm just wondering if people filed for large insurance policies back then?

Answer 1

Is it term? Whole life?

Answer 2

OK, a big four bedroom house in the 40's - at least my grandparents, in a lovely neighborhood on two acres, cost  $4900.  So I seriously doubt the policy would have been more than a big house like that.  It would be the equivelent of a $1,000,000 today.  And parents just don't insure their kids for that much.

Answer 3

One never knows but I would doubt it.  The average policy in the 40's 50's and even 60's was about 10 -20 k.  But that was a nice size policy back then.

Answer 4

Back then, the majority of life insurance that was written was called "industrial" insurance; usually "weekly premium" insurance. Although, there were larger policies written for people with "means", an industrial, or weekly prmium policy was usually written in small amounts, such as $500 or $1000. These policies were whole life, or limited pay whole life, such as 20-pay, 10-pay. They also had other benefits in the policies, such as accidental death and loss of eyesight and limb. The policies accumulated cash values.

The reason for these types of policies was that most people couldn't afford a lot of coverage, so they bought policies just to "put them away"; funeral costs.

The industrial policy was designed for people, and their families, who worked in the industrial occupations, and could pay their premiums weekly, so it would not be a hardship to pay for a whole month at a time. Life insurance companies continued to sell these types of policies up into the late 1970's. The weekly premiums could be as little as 5 cents, 10 cts, 25 cts, or even $1.50, depending on the age and the amount of the policy at issue.

The agents, called debit agents, or home service agents, would go to the employment site, or to the home and collect those premiums every week. Later, it got to where the insureds could afford to pay monthly, 4 or 5 weeks at a time. By collecting premiums, the agent always had a handle on life changes, marriages, births, deaths, job changes, etc. which would have an effect on the need for life insurance. It was easy to get referrals, because the agent kept up with the families.

There are home service agents still in existence today. They have the ability to write MAO or MDO (monthly account ordinary, monthly debit ordinary) insurance. This is usaually for low-income families who have no checking account. But most ploicies are written EFT (electronic fund transfer) which is automatically deducted from checking accounts.

Over time, it would be common to see 5, 6, 10 or more of these policies in one household. They bought policies for themselves, children, and grandchildren.

There are a lot of these policies still on the books today, and usually the total premiums paid over time could be more than the face amount of the policy, assuming the insured lived long enough.

Some insurance companies that underwrote industrial policies eventually made them "paid up" when the total premiums paid equalled the death benefit.

The industrial, weekly premiums met a need at a time when incomes were low and jobs were scarce.