The preamble to an Act of Parliament of 1601 in Britain included the phrase
By means of which policies of assurance…..the loss lighteth rather easily upon many, than heavily upon few.
This phrase explains rather well the basic idea of insurance, which is that losses shall be shared more evenly among the whole population, rather than be suffered by just the odd unfortunate person. The word ‘population’ here can mean just those who are interested, or it can mean every person in the country, as for instance in Britain with its National Insurance Scheme. Whichever meaning it has, we must be clear that the losses that are suffered are real enough. The family house is burnt down have suffered a loss, but if they were fully insured against fire it may cost them only a small premium. Enough money will be provided from the pool to restore them to their previous condition in a rebuilt house, or similar accommodation elsewhere.
It is worth returning to the phrase from the Act of 1601. It says so exactly, in its old-fashioned way, what happens when a heavy loss suffered by one person becomes only a tiny loss, because his partners in the insurance scheme have helped him bear the blows of a cruel and unkind fate—the loss lighteth rather easily upon many than heavily upon few.
By means of which policies of assurance…..the loss lighteth rather easily upon many, than heavily upon few.
This phrase explains rather well the basic idea of insurance, which is that losses shall be shared more evenly among the whole population, rather than be suffered by just the odd unfortunate person. The word ‘population’ here can mean just those who are interested, or it can mean every person in the country, as for instance in Britain with its National Insurance Scheme. Whichever meaning it has, we must be clear that the losses that are suffered are real enough. The family house is burnt down have suffered a loss, but if they were fully insured against fire it may cost them only a small premium. Enough money will be provided from the pool to restore them to their previous condition in a rebuilt house, or similar accommodation elsewhere.
It is worth returning to the phrase from the Act of 1601. It says so exactly, in its old-fashioned way, what happens when a heavy loss suffered by one person becomes only a tiny loss, because his partners in the insurance scheme have helped him bear the blows of a cruel and unkind fate—the loss lighteth rather easily upon many than heavily upon few.
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