Why Is Life Insurance Important?

By Lisa Olsen Posted in Life Insurance News

Life Insurance Beginnings

Life insurance has existed in some form or another for millennia. The beginnings of life insurance date back to early Rome, where burial clubs were a popular way of helping members pay for burials and assist the surviving family of the deceased with other expenses.

Life insurance in its modern form dates back to England in the 1800s. Lloyd’s of London, then Lloyd’s Coffee House would insure the traders before they left for other countries. Life insurance in America started in the mid-1700s as a financial protection for widows and their children. Most of the insurance companies in America before the Civil War specialized in life insurance for slaves. They were treated like the rest of the property and the owner of the slave would receive the death benefit not the family of the slave.

Modern Life Insurance

In its modern form, life insurance is used as a way to offer monetary relief to the beneficiaries after the death of a loved one. Today the average funeral can cost is between $6,000 and $7,000. For a family with a modest income, this can entirely wipe out their savings account if they could even afford the cost in the first place.

For those who are the primary breadwinner in their family, their death could leave their surviving family financially devastated. Life insurance is vitally important for those with children. It is extremely important to make an effort to continue to support them financially even after death. It is quite common these days to have double-income households which can make life insurance even more important. This can be especially true if the surviving spouse/partner will have to alter their work to care for children.

Continued Financial Stability

Continuing the financial stability of the surviving family after a death is an important gift. It is so important that many companies offer life insurance as a benefit. Any person can be named as beneficiary. If someone cares for an elderly parent they can name their parent as a beneficiary to insure continued care in the event of the insured party’s untimely death.

Related posts:

  1. What Is A Policy Change Clause For Low Cost Life Insurance?
  2. When Someone Dies, Who “Owns” A Life Insurance Policy?
  3. How Do You Buy Life Insurance?
  4. What Does Permanent Life Insurance Mean?
  5. Who Can Contest A Beneficiary On A Life Insurance Policy?

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