In the early 19th century, Americans just wouldn’t buy life insurance.
The problem wasn’t mere procrastination. Many people deemed the very idea immoral. “Has a man the right to make the continuance of his life the basis of a bargain? Is it not turning a very solemn thing into a mere commercial transaction?” wrote a typical critic. Religious traditionalists believed they should trust in God’s providence, not a financial contract, to care for their loved ones after death. Paternalists, meanwhile, warned that beneficiaries wouldn’t know how to manage a sudden windfall. The New York Times opined that life insurance eroded the work ethic and discouraged steady savings. It was, the paper editorialized, “calculated to encourage reliance upon something besides economy and industry and to lead accordingly to the relaxation and decay of those cardinal virtues of society.”
What changed? Virginia Postrel explains.
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