Whole life or not whole life: that is the life insurance question

Part 1: The origin of life insurance

Whole life insurance was the original form of the product; yet it has become a topic of controversy today. This series of articles will provide some clarity to the dilemma, and help you make a wise product choice.

Let’s start with the origin of life insurance.

Whole life insurance was the original form of the product, in the sense that it was understood that people needed to be insured for their entire life. Why? Because the purpose of the “insurance ” was to pay for a proper burial, whenever that occurred.

It all started back in Ancient Rome. Here is the account provided by Think Advisor:

100 B.C.
“The origins of the concept of life insurance, as we know it, can be traced to ancient Rome. Caius Marius, a Roman military leader, created a burial club among his troops, so in the event of the unexpected death of a club member, other members would pay for the funeral expenses.

“Many similar clubs originated in this era. Romans believed anyone who was improperly buried would become an unhappy ghost, so the clubs were embraced by the government and military because of the deep conviction that it was absolutely essential for each person, regardless of social standing, to be buried in the correct manner. The clubs later evolved to also provide a stipend to the survivors of the deceased.”
https://www.thinkadvisor.com/2013/09/09/a-brief-history-of-life-insurance/

You can see that the intent was more than preserve to the dignity of the departed with a proper burial — it was also to take care of survivors. It is not surprising that the “fraternal” nature of the early burial societies would lead to such a compassionate and moral mission.

For me, this is the essential purpose of the product. In our next article, we will review how the fraternal organization became more “corporate.”