Let’s face it. No one wants to think of their own mortality. I know I certainly don’t. But, as Mark Twain so eloquently stated over a century ago, “Nothing is certain in life but death and taxes.” Life insurance is an important and versatile tool that can be used for a lot of different reasons. It can be used to replace lost income resulting from an untimely death, can be used to pay for burial and other final expenses, can be used to pay off the remaining balance for a mortgage, can transfer wealth to family, can provide funds for college education for children and grandchildren, and can help pay for those pesky taxes that Mark Twain wrote about as well as can be used to establish estate liquidity.
While life insurance as we recognize it today has only been around for a little over 250 years, man throughout history has looked at different ways to take care of costs associated with an individual’s passing away.
Caius Marius, a Roman military leader, created a burial club around 100 B.C. that his soldiers participated in in order to provide for the unexpected burial expenses resulting from a members untimely passing. This type of club expanded to include providing a stipend for the spouse of the deceased individual. These types of clubs existed until around 450 A.D. and the Fall of the Roman Empire.
It wasn’t until 1688, over 1,000 years after the collapse of the Roman Empire, that the concept of modern insurance would come to fruition. Marine insurance, designed to protect ship owners and shipping merchants from going bankrupt in the event of disaster occurring at sea, began in Edward Lloyd’s Coffee House, a small shop on London’ Tower Street (the beginnings of what we know today as Lloyd’s of London).
The year 1759 saw the first life insurance corporation in America begin. The Presbyterian Synod of Philadelphia sponsored this organization in order to protect Presbyterian ministers and their dependents. Episcopalian ministers would create a similar entity roughly a decade later
The year 1837 saw many mutual life insurance companies begin, with companies like New York Life, Mass Mutual, John Hancock and MetLife starting around this period.
The Widows and Orphans Friendly Society, founded in Newark, New Jersey in 1875, revolutionized life insurance with its offering of burial insurance. This was the first company in the United States to make life insurance available to the working class and would eventually become Prudential.
The year 1911 saw group life insurance begin when Equitable Life Assurance Society (AXA Equitable today) insured all 125 employees of the Pantasote Leather Company without requiring medical underwriting or individual applications.
1965 was an important year for those in the Armed Forces. That year saw the enactment of Serviceman’s Group Life Insurance, which provides life insurance to members of the armed forces on active duty. The insurance is underwritten by a pool of commercial insurers, and the federal government pays administrative expenses and the extra cost resulting from the increased risk of military duty.
I personally own private life insurance policies as well as have Serviceman’s Group Life Insurance as a result of currently serving in the Oregon Army National Guard. Life insurance allows me to rest easy knowing that should something ever happen to me, my family is taken care of financially, and my church, my alma maters (Go Ducks & Fight On) and charities that I care about all are able to receive financial support.
I encourage all of you that read this to make sure you are ready, and explore all of your options that are available. Oftentimes financial institutions, fraternal organizations, and employers will offer some life insurance coverage to its members at no charge. I am able to assist you with exploring options for other coverage that fits your needs, just give me a call.