In October of 1929, the American stock market suffered severe losses. It plunged over 22% in just a few short days, making headlines across the country.
But this was only the beginning. Over the next several years, the markets would have difficulty recovering. The Dow Jones Industrial Average would take a staggering 32-year setback, losing nearly 90% of its value.
From it’s peak of 381.17 in September 1929, it would close at a shocking 41.22 on July 8, 1932. It would take another 22 years to surpass it’s all time high before the crash in 1929.
Nearly 25% of all American’s would be unemployed and unable to find work. Over 40% of banks would shutdown. Millions of savings accounts would simply disappear.
Here’s where it gets interesting.
While banks, businesses, and government sectors were closing their doors, one sector of the economy stood strong and steady, unaffected by these horrible circumstances.
Life insurance companies remained virtually unscathed. While the markets suffered severe losses, owners of cash value life insurance didn’t lose a dime.
They didn’t lose any money in the Great Depression, and they haven’t lost money since. In fact, it was such a stable place to have money that while many people lost everything, those who owned life insurance were paid profits in every single year of the Great Depression.
It was truly a beacon of hope amid fear and chaos. It was the only place that truly triumphed the devastation of that time.
(Source: Money. Wealth. Life Insurance – How the Wealthy use Life Insurance as a Tax-free personal bank to super-charge their savings by Jake Thompson.)
Views expressed in this article are the personal opinion of Subhajay Naga from Infotech venture.
