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. Its founder is the Supreme Court Justice Louis D. Brandeis. Its creation was a result of the stock market crash in 1907 and the questionable practices of the insurance industry during Brandeis’ time.
SBLI’s aim is to sell low-cost policies to the average American family.
Insuranceopedia Explains Savings Bank Life Insurance
In 1907, a failed ploy to corner the United Corner Company by a number of financial institutions caused a financial crisis. A good number of banks and other financial firms went bankrupt and closed. This was exacerbated by the fact that the US did not have a central bank at that time.
Louis Brandeis was investigating insurance companies by this time and his findings made him describe the practices of the insurance industry as “legalized robbery.” By consulting with other people who were also concerned about the state of insurance in the country, he was able to establish the SBLI system. The first bank to adopt it was the Whitman Savings Bank. He also drafted the bill that turned the savings bank insurance into law. This law made insurance policies affordable.