Weekly Premium Insurance

Weekly premium insurance is a type of financial protection where the payments that the insured makes in return for coverage are paid weekly. This type of insurance was introduced by Prudential in 1875 and was common in the late 1800s and early 1900s. At that time, insurers were unable to get insurance with monthly premium payments to catch on with consumers. The small weekly premium payments were designed to match up with workers' pay schedules and modest incomes. Also known as industrial life insurance.

Weekly premiums were a feature of industrial insurance, a type of life insurance product offered to workers employed in industrial jobs such as manufacturing. Insurance companies collected the premium payments by sending agents to people's homes. In the mid 1900s, the number of weekly premium insurance policies began to decline because rising incomes made larger and less frequent premium payments more affordable for many families.

In the early days, insurance was often sold, not bought, and that suited insurance companies fine. Behind this thinking is the notion of adverse selection. It's the idea that people who seek out insurance are more likely to need or use it and therefore are worse risks. So that's on reason why insurers sent out armies of salesmen to convince people that insurance was a good idea. 

The weekly policies of yesteryear were mainly whole life insurance. Weekly premiums meant the insurers collected money faster, thus lowering the cost of the policies. Workers were sold on the idea of paying a few dollars a week for, say $2,000 worth of coverage if they died, or double that if they died in an accident, known as double indemnity. The insurance man would show up on payday, of course, either at the policy holder's home or business to collect the premium.

Building cash value was a top selling point of these policies, and still is today. At the end of 20 or 20 years worth of payments, the policy had built a cash value often equal to the premiums paid in or the policy's face value. People could borrow money against the policies as well.

Disability policies were also sold this way, long before Social Security provided disability coverage started in 1956. Before then, there was little for the average worker to fall back on after an injury on the job made it impossible to continue working.

For people today, it's hard to imagine a society where workers got nothing from their employer beyond a paycheck and there were no government safety nets or retirement benefits.