What is Industrial Life Insurance?
How industrial life insurance works
Industrial life insurance, also called debit life insurance or street insurance, is a type of low-coverage policy that was traditionally marketed to workers in lower-paying industries, specifically those in industrial jobs.
While most life insurance policies come with death benefits in the hundreds of thousands of dollars, the death benefit of an industrial life insurance is usually $10,000 or less. As a result, it’s a type of burial insurance. It’s designed to cover funeral expenses and limited end-of-life costs, rather than any sort of lasting income replacement
Historically, industrial life insurance premiums were collected in-person by an agent, also called a tally man, who came to the policy owner’s home.
The premiums for industrial life insurance were generally paid on a very regular basis. While other insurance policies might be paid monthly, it’s not uncommon for an industrial policy’s premiums to get collected weekly or biweekly.
Phasing out industrial life insurance
Industrial life insurance is now very rare owing to two major issues.
The first is that these policies offered low coverage to the policy owner but still cost a relatively high amount to the insurance provider. That’s because sending out an agent to collect premiums in-person, especially on such a frequent basis, required a significant investment from the insurance provider.
Additionally, industrial life insurance has become less sought-after as digital insurance tools develop further. Now, many policy owners want the ability to manage their policies and pay their premiums online.
With industrial life insurance, records of premium payments were often maintained in a book that the policy owner would have to give their insurer in order to make a claim. With online insurance tools, today’s policy owners can track their policy payments without having to maintain hard-copy records.