The History of Life Insurance

Are you wondering about the history of life insurance? In this article, we will help you understand how life insurance got started.

Life insurance may seem like a modern idea, but once you are familiar with its history, you’ll realize that it’s been there all along. In fact, life insurance is older than Christianity.

Today, life insurance is something we value as part of a sound financial plan. It provides financial protection for our families and loved ones.

It offers a way for parents to help ensure that their children will be financially cared for in the event of their death.

Some types of life insurance serve as a vehicle for cash accumulation.

Read on to learn how life insurance has evolved over the years and how it can protect you from financial risks.

Life Insurance In Ancient Times

The concept of insurance that is spreading risk among many has been around since ancient times. Let’s take a look at the history of life insurance during ancient times.

1750 BC – King Hammurabi’s Code

The first written insurance policy can be found on a Babylonian obelisk monument containing the code of King Hammurabi during ancient times. The Hammurabi Code was one of the first known written laws. One of these laws offers basic insurance. The law states that the debtor doesn’t have to pay back his loans if some personal catastrophe like disability, death, flooding, etc. made it impossible.

100 BC – Roman Burial Clubs

The origins of the concept of life insurance as we know it today can be traced back to ancient Rome.

The Romans believed that everyone should have a proper burial. They believed that anyone who died and was improperly buried would become an unhappy ghost. The Romans believed this so fervently that Caius Marius, a Roman military leader, created a burial club among his troops to assist the poor who couldn’t afford a proper burial.

The burial club was intended in case there is an unexpected death among the troops. In case of an unexpected death, other club members would pay for the funeral expenses. The club would pool the members’ resources to give a proper burial to the deceased soldier. The pooled funds made it possible for poor soldiers to afford burial expenses.

The pooling of resources closely mirrors the idea of today’s life insurance premiums. The club later provides a stipend to the survivors of the deceased, which is very similar to the modern-day death benefit. This practice is the earliest form of life insurance.

The concept disappeared after the Roman Empire fell around 450 A.D.

The Beginning Of Modern Life Insurance

History of life insurance. Modern life insurance as we know it.

1583 AD

The first recorded life insurance policy appeared in The Annals of the American Academy of Political and Social Science, Vol. 26, Insurance (September 1905 issue)

The insurance policy, which is more than a wager, dates back to June 18, 1583, in London, England. The insured is William Gybbons, who was a salter. He preserved meat and fish. The policy owner is Richard Martin, a resident of and alderman of London. The insurance company is the Thirteen Merchants of London.

Martin paid a one-time “premium” of 30 pounds sterling and was given a written promise (policy) that in case Gybbons died within one year (one-year term policy), Martin would receive a death benefit of 400 pounds.

Gybbons died before the year was up, but the merchants didn’t give the promise death benefit because they insisted that a year means 12 lunar months of 28 days each, and Gybbons died after the lunar year was up.

Martin sued and reasoned that a year is how often you celebrate your birthday. The court agreed with him and ordered the Thirteen Merchants to pay 400 pounds to Martin.

1620 AD – The First Mortality Tables

John Graunt calculated the very first mortality table in London. He estimated the average lifespans from reviewing church records (which had recorded births and deaths over the years). He figured out the average lifespans of people during his time based on church records. John Graunt was considered to be the first actuary.

1688 AD – Edward Lloyd’s Coffee House

The modern concept of life insurance came into being in Edward Lloyd’s Coffee House, a small shop on London’s Tower Street.

Marine insurance became popular in Europe in the 1600s when they depended on shipping for trade. Lloyd’s Coffee House is their go-to place for shipping, news, and marine insurance.

Shipowners and merchants go to Lloyd’s to form guilds to protect each other’s interests in case of shipwrecks, fire, or pirating. This place became the center for people to share maritime insurance information. In 1769, a group of professional insurance underwriters established New Lloyd’s Coffee House into Lloyd’s London.

1662 – First Mortuary Table Based on Premium and Average Life Span

Astronomer Edmund Halley wrote the first mortuary table in 1662 in London. Halley wrote the book Natural and Political Observations Made Upon the Bills of Mortality 1662. This table is based on the life insurance premium and the average life spans based on statistical laws of mortality and compound interest.

Life Insurance In Early America

History of life insurance in early America.

1706 – The Amicable Society for Perpetual Assurance

The first life insurance company came into being in the early 18th century. The first life insurance company to offer life insurance was the Amicable Society for a Perpetual Assurance Office. It was founded in London in 1706 by Sir Thomas Allen and William Talbot. They used mathematics and statistics in computing premiums.

In the life plan first designed by Amicable, policyholders between the ages of 12 and 55 would pay a fixed annual premium per share (1 and 3 shares) regardless of health status.

Wives and children of policyholders would receive the dividends or a portion of the “amicable contributions” after the policyholder passed away. The death benefit is proportionate to the number of shares owned by the policyholder.

The concept of Amicable highlights the idea that human life has value, and insurance can provide for beneficiaries to cover funeral-related expenses.

1756 – Mortuary Table Based on Premium and Age

In 1756, James Dodson reworked the table made by Edmund Halley, which links the premium rate to age. Dodson, a mathematician and actuary established the statistical tools for developing modern life insurance. He tried to establish a new company after being refused admission to the Amicable Life Assurance Society because of his advanced age.

Dodson founded The Equitable Life Assurance Society. His company issues premiums to correctly offset the risks of long-term life assurance policies. He writes life insurance on a level premium basis, with premiums computed according to the insured’s age. He promoted the refund for any overcharge of premiums as dividends. His vision garnered him the title “father of life insurance” in England.

1759 – Oldest Insurance Company: Presbyterian Ministers Fund for Life Insurance

Presbyterian Ministers’ Fund was the first life insurance company in the United States.

Its purpose is to provide life insurance to widows and orphans of deceased ministers. However, misconceptions about life insurance as gambling, prevented its growth. Some people perceived it as giving a monetary value to someone’s life, not an aid to help surviving family members in their time of need.

Presbyterian Synod of Philadelphia sponsored the first life insurance corporation in the U.S. to benefit Presbyterian ministers and their dependents. The Episcopalian ministers organized a similar fund for their ministers a decade later.

Presbyterian Ministers Fund sold life insurance policies to Presbyterian evangelical ministers and their families. PMF is the first life insurance company that tackled the idea of offering life insurance to all. It remained in existence for over two hundred years, until it was bought out in the early 1990s.

1762 – Edward Rowe Mores and the First Life Insurance Entity

After The Equitable Society leader James Dodson died, Edward Rowe Mores were elected leader in 1762. The company became the Society of Equitable Assurances on Lives and Survivorship. It is the world’s first mutual insurer. Today, society is referred to as Equitable Life.

Edward Rowe Mores is the very first to use the title actuary regarding life insurance.

Rowe pioneered premiums based on the mortality rate. His work lay the framework for scientific insurance practice and development. This is the basis of modern life assurance which all life assurance schemes are based.

In 1776 Equitable Society carried out the first actuarial valuation of liabilities, after which they distributed the first reversionary bonus among its members. They treat their members equitably, and the Directors ensure that the policyholders receive a fair return on their investments. Premiums are computed based on age, and anybody can be approved regardless of their state of health and other circumstances.

Life Insurance In The 19Th Century

History of life insurance during the 19th century.


The panic of 1837 resulted in the financial crisis, which spurred a shift toward mutualization for life insurance companies. Between the years 1838 and 1849, 17 mutual companies required little initial capital, were chartered, and only one life insurance company obtained capital on a stock basis.

The spread of mutual companies and other developments like changes allowing women to buy life insurance and acceptance of life insurance, not as gambling, created a boom period for life insurance companies.

Many of today’s largest life insurance companies were formed during this period, including New York Life (1845), Mass Mutual (1851), Guardian Life (1860), John Hancock (1862), and Met Life (1864).

Late 1860’s – Life Insurance Grows in Scale

In the late 1860s, life insurance was put in the hands of the state after the Supreme Court ruling in Paul vs. Virginia.

After this decision, there was a need for state regulation that led to the development of the National Insurance Convention in 1871, which became the National Association of Insurance Commissioners we know today.

The state regulation helped increase consumer confidence in life insurance companies. New legislation led to more positive changes in life insurance.

Finally, women were empowered to purchase their life insurance policies lawfully and receive their rightful proceeds when assigned to be a beneficiary. These changes created industry expansion, which makes life insurance accessible to everybody.

1868 – The Ancient Order of United Workmen

Jordan Upchurch, a railroad master mechanic, organized the first fraternal benefit society in the United States. It is called the Ancient Order of United Workmen. During this time, life insurance was considered a luxury investment, but the fraternity provided its members’ life insurance protection for their dependents.

The fraternity provided its members with mutual social and financial support after the American Civil War. It was the first fraternal society that offered insurance and sickness, accident, death, and burial policies.

On January 1, 1948, the Ancient Order of United Workmen of North Dakota officially became Pioneer Mutual.


During the depression of 1871 to 1874, life insurance companies stopped operations, with 32 failing outright, resulting in $35 million in losses for policyholders.

1875 – Widows and Orphans Friendly Society

The Widows and Orphans Friendly Society of Newark, N.J. becomes the first American company to make life insurance accessible to the working class. They were the first company to sell burial insurance. This company eventually became Prudential Life.

1879 – Army and Navy Mutual Aid Association

In 1879, military officers formed the Army and Navy Mutual Aid Association to benefit children and widows of military officers. It came into being after seeing first-hand the plight of those left behind after the many deaths in the Battle of Little.

It is now known as the American Armed Forces Mutual Aid Association, which serves the Military community and continuously provides members with low-cost life insurance and survivor assistance.

It also includes expedited death benefit payments, securing all government benefits, and preparing government and insurance claims for the bereaved families of its members.

Life Insurance In The 20Th Century

History of life insurance during the 20th century.

1911 – Group life insurance was established by the Equitable Life Assurance Society (now AXA Equitable). It began when the company wrote a policy covering all 125 employees of Pantasote Leather Company without requiring a medical exam and individual applications. They also insured the employees of Montgomery Ward. In 1912, Equitable Life organized a department to promote group insurance.


When the Titanic sank in 1912, Northwestern Mutual Company released a $500,000 death benefit payout to 13 policy owners. After World War 1, life insurance sales dramatically increased.

By 1920, over 120 million life insurance policies were owned in the U.S., and by 1930 life insurance in force reached an all-time high of $117 billion. During that time, there was approximately one policy for every adult in the country. MetLife insured one in five policies.

1916 – LIMRA is founded

In 1916, the Association of Life Agency Officers, later known as the Life Insurance Management Research Association (LIMRA), was formed. It provides industry-leading research for insurance, retirement, and distribution.


Life insurance dramatically increased after World War 1. In 1930, it reached its peak with $117 billion in force. By the eve of the Great Depression in the 30s, there were more than 120 million life insurance policies, equivalent to one policy for every adult and child living in the U.S. at the time.


In 1965, a law enacted Serviceman’s Group Life Insurance to provide life insurance to every member of the armed forces on active duty. The federal government pays administrative expenses and extra costs resulting from the increased risk of military duty. A pool of commercial insurance companies underwrites insurance.

Insurance in the mid-70s

During this time, 72% of the adult population and more than 90% of all husbands and wives owned some form of life insurance.

Life Insurance In The 21St Century

History of life insurance during our time.

2001 – Post 9/11

Two thousand nine hundred seventy-seven people died in the September 11 terrorist attacks in New York, Pennsylvania, and Washington DC. The Insurance Information Institute estimated a total of $1.2 billion in life insurance claims were paid.

2010 LIMRA Study

2010 LIMRA Life Insurance Ownership Study found that 30% of U.S. households, about 35 million people have no life insurance protection, and only 44% of U.S. households have no individual life insurance. This marks a 50-year low for the life insurance industry.

History of Life Insurance
2019 LIMRA Predictions for the Future

Subsequent studies after 2010 by LIMRA revealed that life insurance ownership has not improved. But the agency predicts a positive future sales outlook for life insurance.

The rise in information technology and artificial intelligence integration into underwriting will reshape the life insurance industry. Conducting business will be easy, improving customer expectations for the life insurance industry.

How Can Funeral Funds Help Me?

Finding a policy if you want burial insurance needn’t be frustrating; working with an independent agency like Funeral Funds will make the process easier and quicker.

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