Savings Bank Life Insurance
What Does Savings Bank Life Insurance Mean?
Savings Bank Life Insurance (SBLI) refers to insurance products sold by a department of a savings bank. It was founded by Supreme Court Justice Louis D. Brandeis in response to the stock market crash of 1907 and the questionable practices in the insurance industry at the time.
SBLI’s goal is to offer low-cost policies to the average American family.
Insuranceopedia Explains Savings Bank Life Insurance
In 1907, a failed attempt by several financial institutions to corner the United Copper Company led to a financial crisis. Many banks and other financial firms went bankrupt and closed, a situation worsened by the lack of a central bank in the U.S. at that time.
Louis Brandeis, who was investigating insurance companies, described the practices of the insurance industry as “legalized robbery.” By collaborating with others concerned about the state of insurance in the country, Brandeis helped establish the Savings Bank Life Insurance (SBLI) system. The first bank to adopt this system was the Whitman Savings Bank. Brandeis also drafted the bill that made savings bank insurance law, making insurance policies more affordable for the public.
