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The interesting history of life insurance

It’s no question that you want to make sure that when the time comes, your family won’t struggle to pay for your funeral. That’s probably one of the main reasons that you want life insurance. But what would you do if life insurance didn’t exist? You’d do what the ancient Romans did—you’d invent it.
February 6, 2020
3 min read
A couple uses their tablet to review their insurance coverage

How did life insurance start?

If you had lived in ancient Rome, you would have been worried about the cost of your funeral. The cost of your funeral procession could have included several paid performers. Your family might have been expected to pay for a band of musicians, actors, singers, and even clowns.

There were also the actual burial fees. The burial grounds and the casket were just two of the necessary expenses. If you were cremated, there was the cost of constructing the fire plus the spices and perfumes used in the ceremony. As you can see, a funeral could get rather pricey. To meet the expenses of an ancient Roman funeral, people began forming burial societies or clubs.

The members of the club would each contribute regularly to the club’s fund that would pay for the future cost of burying a fellow club member. In this way, a sickly or aging club member could be confident that his family would not be stuck with paying for a costly funeral when he died.

When a member died, the society would appoint a committee to arrange and pay for the funeral arrangements. Today, we recognize those ancient Roman burial club funds as one of the earliest known kinds of life insurance.


Who owned the first policy?

It’s hard to imagine modern life without insurance policies. After all, the U.S. alone has over 1,000 insurance companies. Those companies write policies that together are worth trillions of dollars.

But humans were around a long time before someone recorded the first written insurance policy. It happened in London, England in the 1500s. A man named William Gybbon, who made his living preserving meat and fish, purchased a life insurance policy. His friend, Richard Martin, was the beneficiary.


How did life insurance begin in the United States?

Life insurance began in the U.S. in the 1700s. In Pennsylvania, a group of officials of the Presbyterian faith created a fund to protect Presbyterian ministers and their families. It was called the Corporation for Relief of Poor and Distressed Widows and Children of Presbyterian Ministers. With a name like that, you can understand why it was changed to something much simpler—Presbyterian Ministers Fund for Life Insurance.

The business grew slowly. It was difficult to convince people that this new idea of life insurance was worth the investment. Plus, some people thought that it was in poor taste to place a dollar value on human life. Opinions began to change after people saw how widows and orphans benefited from the insurance policies—they gave the families financial help when they needed it the most.

Other life insurance companies followed. By the early 1800s, there were successful life insurance companies not only in Pennsylvania but also New York, Maryland, and Massachusetts. It’s estimated that in the 1830s American life insurance companies wrote policies totaling around $600,000. By 1850, that amount was nearly $100 million.


When did modern U.S. life insurance begin?

Things changed in 1840 when the state of New York passed a law making it legal for a woman to take out, by herself, a life insurance policy on her husband. The same law also gave the widow a significant degree of protection from creditors. Life insurance in America soon experienced a growth spurt as other states and insurance companies began following the example set by New York.

Fortunately, today, there are life insurance policies suitable for the protection of everyone in the family. Help protect those who are important to you. Contact TruStage® today to learn more about modern life insurance. Our experienced agents can help you and your family face the future with confidence.

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