Life Insurance Education

Life insurance education teaches us that he future is uncertain. Even those who can "read" the future say that this. Mankind has always felt terribly vulnerable facing down the uncertainty of the future. People, therefore, do things to cut down on their risk of having to face tragedy, calamity, and so on. Now, there's really not much that people can do to minimize these things. Instead, people do things to mitigate the severity of the effects of these things on their lives.

Life insurance cuts down on the risks that people might face in the future. If the insured dies, the money from his policy goes to his surviving wife, his children, his best friend, or whoever is deemed worthy by him to receive all or some of the death benefit money--an amount which represents the deceased's financial life in continuation, which is now used to settle other debts and/or help along those he loved and upon whom he had an immediate impact while they carry on with their lives.

It used to be that life insurance carriers could name anyone at all as their beneficiary--even someone who was a stranger to them! So, the insured would all too often end up murdered and his fortune dissipated. Necessary regulations have, since then, emerged to prevent the insured from being able to name anyone who cannot be shown to, somehow, have a direct and emotional bearing on the policy holder's life. But the same overall principle still applies: the carrier of life insurance is doing what he can to secure his loved ones' future(s) against the event of his untimely death, which among other losses could be a financial loss to him. Although it probably doesn't seem like it at first, this is a way of showing tangible caring for others.

It seems that the oldest forms of insurance at all trace their roots back to 5000 BCE and the Chinese people. Back then, it is recorded, the Chinese farmers who needed to trade goods over water, such as with the Japanese, started to realize that no matter what they did there were always accidents at sea which, among other losses, resulted in their losing money. So, to mitigate the personal devastation that could very well result from these terrible losses, they came up with a system: ship their crops via several different ships, so that if one or two were lost the bulk of the crops would still make it to their destination. Those who had bought the crops were happy and fulfilled, and the farmers suffered only relatively small financial losses at the most.

It's also said that the ancient Babylonians beginning around 1300 BCE had a system in place whereby the wealthy would guarantee the returns on a commercial sea shipment even in the face of the ship's sinking in exchange for a certain amount of upfront money from the shipping merchants, an amount which would never be repaid other than for recompense of a tragic loss at sea.

But probably the oldest form of life insurance as we know it today comes from the Roman Empire. "Fratres" were formed by free people who had little money; these probably started with Roman military members and expanded to slaves, merchants, and so on. The Romans had a belief against the dead becoming angry, hungry ghosts wandering about. They believed a good burial was essential to safe, secure passage into the afterlife. But that burial cost money. So money was pooled among members of the Fratre; and soon enough it was for more than just giving the. They met once per month and also got together during Festivals. At these times, members were expected to pay their dues. Members who failed to pay their dues for an extended period, such as six months, were told they were no longer entitled to expect burial expenses (or other benefits).

But the entire modern concept of insurance started in England in the late 1600s with traders, ship owners, and merchants meeting at The Lloyds' Coffee House where the ancient Italian Peninsula practice of signing contracts for marine insurance to take part in either the profit or loss of a venture was active. Those who participated in the contracts would sign their names and the assumed amount of risk underneath the contract.

The modern concept of insurance spread to the New World, first with Presbyterian churches and then very soon after with Episcopalian churches, who almost always insured against fire. Benjamin Franklin helped champion the concept of insurance so that from 1787 to 1837 between 25 and 30 new insurance corporations were started. And while just about all of these totally failed, the stage was set.

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