On this day in history : 18th June 1583 – The first recorded life insurance policy is taken out in London – but when a claim is made, just under a year later, it is disputed….
Richard Martin, an Alderman, took out the policy on William Gybbons, a salter of meat and fish – it is not known what the relationship between the two was…. The term of the policy was for 12 months and cost Martin £383…. This was a considerable amount of money in the 1500s….the average daily wage was just 10 pennies a day – bearing in mind at the time there were 12 pennies to a shilling and 20 shillings to a £1…. At a premium of 8% if Gybbons were to die Martin could expect to receive around £4,800….
And indeed he did die – on the 29th of May 1584 – although it is unclear what from…. Equally it is unknown who the underwriters of the policy were – but they appear to have been a shady lot…. To try and wriggle out of paying up they argued that the year was not based on calendar months, as would be expected – but rather on lunar months….i.e. a month being a period of 28 days…. Therefore, as far as they were concerned the policy had expired….
Not surprisingly Martin disputed this and took his case to the courts…. Richard Chandler, whom Queen Elizabeth I had appointed to oversee insurers, agreed with Martin…. But it took until 1587 for the case to be resolved when the Admiralty Court (nobody knows how they got involved) finally settled the argument in Martin’s favour….