The story of the history of life insurance cannot begin without the origins of insurance in general.  Insurance, in the modern sense, is about transferring and distributing risk, a practice which originated as early as ancient civilizations thousands of years before the birth of Christ.  The most primitive form of insurance came about as early as 5000 B.C., when Chinese farmers employed multiple boats when shipping their crops to buyers overseas, in order to provide insurance against the possibility of shipwrecks, which were fairly common. Later during the 13th Century, Babylonians employed a system that protected both the buyer and seller against theft or loss. In this system, wealthy people would cover the losses resulting from any ships lost at sea in exchange for receiving an agreed upon payment of money from ship owners.

The earliest instance of insurance specifically directed toward loss of life occurred in the Roman Empire. The citizens of Rome would form “burial clubs” to help cover the funeral expenses of a deceased member and provide monetary support for the family members of the deceased. This form of life insurance was primarily utilized by the poor, who were not wealthy enough to afford to be buried when they died.

However, it was not until the 17th Century that life insurance evolved into an industry in the United Kingdom while such practices were banned in the rest of Europe. At that time traders, merchants, ship owners, and underwriters would convene at Lloyd’s Coffee House to discuss business deals and draw up insurance contracts. Back then, life insurance was not just a means of risk avoidance but also a form of gambling on the lives of local prominent people who were seriously ill. Making bets on people’s deaths was eventually banned, but the coffee house later became Lloyd’s of London, the famous insurance market of England. The life insurance industry was brought over to the New World, in the mid-1700s, when the American colonies followed the British model. Life insurance would go on to become a pillar industry in America and insurance everywhere would go on to become more sophisticated, with new types of coverage and a variety of services offered.