Lloyds of London, the most famous insurance market in the world, began in Edward Lloyd’s Coffee House in the late 1680s. A group of men began arranging insurance for ships and their cargoes by getting respectable, wealthy businessmen to invest through buying small amounts of the total risk. It is a Members Society, not an insurance company, and was officially recognised in 1871 when it was incorporated by an Act of Parliament called the Lloyd’s Act.
Three hundred years later, it is still a place where financiers, underwriters and brokers meet up to spread risk and
you can get insurance for pretty much anything – cars, buildings, lives, household contents, horses, pets – even the insurer’s have insurance!
Wikipedia says that “Insurance involves pooling funds from many insured entities (known as exposures) in order to pay for relatively uncommon but severely devastating losses which can occur to these entities. The insured entities are therefore protected from risk for a fee, with the fee being dependent upon the frequency and severity of the event occurring. In order to be insurable, the risk insured against must meet certain characteristics in order to be an insurable risk. Insurance is a commercial enterprise and a major part of the financial services industry, but individual entities can also self-insure through saving money for possible future losses.”
But the unenlightened will always ask: “Who actually needs insurance?” Even with today’s modern reliance on breakable consumables, holidays and weddings at the mercy of the weather and natural disasters – the recent volcanic ash cloud being a prime example, there are still people will tell you that you are better off putting a sum of money away each month and using that if something unexpected happens. However, it’s no good if the ‘something unexpected’ happens the month after you’ve started putting the money away – obviously there is nothing in the pot to cover the problem.
Health insurance is probably the most obvious area in which the fallibility of the anti-insurance argument is most obvious. If you can’t work, you can’t earn money to pay for anything… even the health care that you need to get well. If you don’t get medical treatment promptly, the condition is more likely to be detrimental to your long-term health.
The idea of health insurance was first raised in 1694 by Hugh the Elder Chamberlen but whilst there was ‘accident’ insurance from the 1850s (which worked much like modern disability insurance) and a form of ‘sickness’ coverage began in 1890, the concept didn’t actually become a recognised term until 1911, when the British Parliament passed the National Insurance Act. However, although many European nations adopted a variety of state-administered, compulsory insurance schemes before 1920, health insurance was slow to catch on in the U.S.
Whilst their first employer-sponsored group disability policy was issued in 1911, all other healthcare costs were down to the patient for the next six decades, when today’s comprehensive private health insurance policies covering began to emerge.
A modern health insurance policy can be renewable monthly or yearly and takes the form of a contract between the insurance provider and a private individual or his employer. Today many companies offer healthcare provision as part of the salary package in order to promote the smooth running of business life and avoid too much time being lost on sick leave.
This is a cost-effective strategy for the larger companies, but a huge drain for smaller business owners and many find themselves laying out huge premiums against the possibility of future employee illness. Those in the know have discovered that, by using a variety of different techniques in the formation of the contract and benefits and making the most of all the tax breaks, these costs can be greatly reduced. Netquote self employed group health have published a detailed list of such tactics.
And, with the power of the internet, it is still possible to get a good deal in this area if you shop around using the keyword group health online
Insurance can be a very complicated business, with lots of caveats and provisos, but you can click on the link to find out more about health insurance information.
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