When was a Life Insurance Policy used First?

It may be hard to believe, but life insurance can be traced back to Caius Marius in ancient Rome in 100 B.C. He was a military leader that established a burial group for his troops so in the case of one of their deaths the rest of the members would pay the expenses of burial. There were other clubs during this time, but there was no policy put in place and at the fall of the Roman Empire, so it was these types of groups that helped to pay for burial expenses.

As a matter of fact, there is no mention of any type of insurance until 1688 when merchants, ship captains, and ship owners would have meetings at the Edward Lloyd’s Coffee House that established a modern type of insurance method is close to what is used today. The New Lloyd’s Coffee House was established in 1769.

In the United States, the first life insurance company using policies was in 1759 by the Presbyterian Synod of Philadelphia that would benefit only the pastors and their dependents. Other churches also began to create this type of insurance for their ministers and dependents.

In 1735 there was an insurance company, but it was not for life insurance by for fire insurance. Life insurance was added to the Charleston, South Carolina insurance company in 1760.

During 1837, the financial crisis hit and mutual insurance companies began to spring up especially between 1838 and 1849 when some of the largest insurance companies of today were founded such as MetLife, John Hancock, MassMutual, and New York Life. During the depression (1871 to 1874) operations of insurance companies ceased to exist, which caused policyholders to lose $35 million.

In Newark, New Jersey in 1875, the Widows and Orphans Friendly Society established an insurance policy known as burial insurance which was the very first life insurance that was for the working class. This company soon became known as Prudential.