The development of life insurance is generally believed to be tightly connected to the increased income dispersion in conjunction with the rise of the wage-earning middle class in the nineteenth century. Life insurance became a necessary substitute for the safety net previously provided by the agricultural society, facilitating the existence of a middle class lacking real property. Scholars therefore view the use of life insurance as central to the improvement and diversification of the middle-class standard of living.

However, at least as important as the growth of the middle class in the nineteenth century was the rise of the working class. The great expansion of life insurance taking place in the late nineteenth century was thus not only accomplished through ordinary life insurance but also through industrial life insurance, which was especially designed for working-class conditions with premiums payable weekly, collected by agents at the house of the insured. The compensation of agents was done on a commission basis, sometimes both on the amount of new business written and upon the amount of premiums collected. The claim was also paid shortly after the death of the insured. All this implied considerable deviations and new elements in relation to the operation of ordinary life insurance.

Industrial life insurance, with its beginnings in England in the 1850s, came to be immensely popular and expanded in many Western countries.