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The History of Life Insurance

Death conjures natural feelings of fear from us mankind. However, the realization and acceptance that it is an inevitable thing can help us focus on preparing for it rather than avoiding it, which has become one of the most important milestones of modern civilization. Throughout history, risk protection became a primary goal of humans and institutions, which was what insurance was all about.

The first record of life insurance can be dated back as early as 100 BC during the days of the ancient Romans. They believed that in order to prevent being a tortured ghost, a dead body had to be buried properly, which included extravagant ceremonies to honor the life of the dead. These high standards made citizens join burial clubs which was started by Caius Marius, a Roman military leader. Members contribute financially to these clubs, and when one member dies, the club would finance the burial and even pay a stipend to the family of the deceased.

Meanwhile, modern life insurance began during the 17th century in England. Underwriters during that time would meet at public coffee houses to discuss policies for ship owners, merchants, and other traders. In 1662, London draper John Graunt discovered the patterns of death and longevity in a certain group of people. In 1693, astronomer Edmond Halley created the first mortality table linking life insurance premiums and average life spans.

The first form of life insurance in the United States came from Presbyterian Synods in Philadelphia and New York, who established the Corporation for Relief of Poor and Distressed Widows and Children of Presbyterian Ministers in 1759. This was followed by Episcopalian priests who began a fund of their own in 1769. Over twenty new life insurance companies were started between 1787 and 1837.

The New York fire in 1835 drew people’s attention to the need to provide for sudden and large losses, wherein Massachusetts became the first state to require companies to maintain such reserves two years later. The great fire of Chicago in 1871 even stressed out the damages caused by fire especially in dense cities, paving the way for the practice of reinsurance. Meanwhile, public liability insurance made a debut in the 1880’s with the invention of the automobile.

Many societies during the 19th century were founded to insure the life and death of members, with fraternal orders providing cheap, members-only insurance. Many employers have started sponsoring group insurance policies for employees which also include accidental and sickness benefits and pensions, with employees contributing a portion of their salary to these insurance premiums. To date, more and more updates are being made to improve the features of life insurance.

The thought of death was never comfortable. However, with all the emotional stresses that a family has to go through after losing a member, the least thing anyone would want is additional financial burden. True that the proceeds can never replace your worth, but consider purchasing an insurance policy as an ultimate act of selfless love that would help eliminate further struggles on their part.

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