Life Insurance is as Old as Ancient Rome

The Roman military commander Caius Marius instituted a concept called the Burial Club for the beneficiaries of Roman soldiers, similar to our modern day final expense life insurance. Burial procedures were steeped in religious superstition to the point that the dearly departed would haunt their family and friends if they were not given a proper burial. These clubs evolved into burial societies with strict adherence to their procedures and beliefs. Roman legions were successful for almost 600 years and the soldiers who survived out numbered the solders who died. Enter the first practical use of the concept of the law of large numbers, the very math that insurance companies use to determine calculate probabilities of death among a specific demographic.

Sir Edmund Halley designed the first actuarial model for life insurance in 1693. The Amicable Society issued the first life insurance policy in 1706 in England. In the U.S. in 1759 The Presbyterian Minister’s Fund was formed to take care of the widows and children of deceased ministers. In 1762 The Society of Equitable Insurance was formed and issued life insurance policies, the predecessor of what is now called AXA. In 1835 the venerable New England Mutual, the first U.S. mutual company was formed and now is owned by Metropolitan.

There are thousands of life insurance companies worldwide with trillions of dollars in force on millions of policy insureds with several reinsurance companies to share the risk. The majority of life insurance policies were of a permanent cash value nature, no term life insurance back in the day. The Great Depression drained the financial resources of millions of Americans, but many also survived on their cash value life insurance to make ends meet.

In the Twenty First century, life insurance has become part of the culture of protecting the breadwinner at home, the rainmaker in business and the ongoing service of thousands of charities. It has 300-year history and is an inseparable part of financial planning today.