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During the 13th century Babylon, wealthy people agreed to pay for any loss of ships that might sink in exchange for an agreed upon amount from ship owners. You might say these were the original life insurance leads. Sinking of ships, piracy, and natural disasters were common occurrences during the early years of merchants, ship owners, and livelihoods of traders depended on their modes of transport; when knowledge of safe-keeping and ship harbouring was nil.

A form of life insurance leads in the early Roman days had organisations called “burial clubs”. They insured that the person being insured would have money for burial. These clubs were convenient and usually had memberships of slaves, the military and the average citizen. To become a member, wine was part of their initiation dues. They formed these “Fratres” (which is most likely taken from the Latin word for “Fraternity”. They met every month and also during times of feasts and festivals. They also paid their fees toward membership, and new members, in addition to paying an entrance fee, would contribute wine, which was considered sacred, to the group. During meetings and after their sacrifices, everyone ate.

The very first organizers of insurance were ship owners, traders and merchants. The insurance concept came to the New World and started in Charleston, South Carolina in 1732. Although this was originally for fire insurance, the first life insurance company surfaced somewhere around 1735, mainly for the benefit of Presbyterian ministers. Benjamin Franklin, among his numerous inventions, was a major role-player in developing fire insurance, established in 1752.

Surely, this is one of those financial instruments that should be based on love and care for the benefit of those you love. There may be as well the personal advantages of insurance, but the major drive is to make sure the ones you care about are well protected financially, so that they can go on and live without feeling the burden of finances that come about as a result of funeral and the resulting expenses of burial and to ease financial strain.

This ensures that while you know you have sufficient coverage, you can feel more at ease using your current assets to enjoy retirement. You can “pay down” the principal, as long as you have a lifetime permanent insurance as your backup. Although there are many different varieties, they all have similarities, such as paying premiums. To people named in your policy, the administers funds to them, which are called your “beneficiaries”, and should you die, the proceeds would go to them, and they would receive the amount tax-free. There are various ways to find those. Two other forms are called “whole life” and “universal life.” The money from these policies can be accessed to pay for education, retirement, and many other financial reasons. Life insurance can also be the beginning of solid foundation for financial planning.