History of UK life insurance

Posted in: Finance Last updated: 27 Mar 2014

Life insurance might seem like a modern day product but in fact, it’s core principles were formed over 2000-years ago. Protecting against risk has been a primary concern throughout the ages, and accepting mortality is one of the most important steps humanity ever took in creating modern civilisation. So, where did life cover stem from and why was it created in the first place? Take a walk through the history of life insurance using our timeline.

100 BC

The first historical record of what we know as life insurance came from ancient Romans – when Caius Marius, a Roman military leader, created a ‘burial club’ amongst his troops. Other groups followed in its footsteps – these groups were originally made up of soldiers but eventually included all levels of Roman society. Romans believed that if a person was not buried correctly, their spirit would become troubled and wouldn’t be able to pass into the next world.

These superstitious views meant it was really important to hold elaborate ceremonies to give the deceased a good send off. To meet these high standards, citizens would join a ‘burial club’ and contribute money to the club on a monthly basis. If a member died, the club would finance the funeral and sometimes even give the family of the deceased a portion of the money.


The earliest life insurance policy in England came into effect on the June 15, 1583. The policy was on the life of ‘William Gybbons’ who was a salter (someone who treats meat and fish) and was taken out by ‘Richard Martin’. In those days, life insurance policies where underwritten by individuals as opposed to insurance companies, and could be taken out on perfect strangers.

It was also a common practice for people to take out life policies on the rich and famous in the hope that they might benefit if the person died. This provided a legal loophole to what we would call a form of gambling and was rife for over 200 years. One gentleman’s club in the 1770s preferred this type of gambling to any other variety, with a quarter of bets placed on the death of a third party, compared to only 2.5% on horse races.


The first company to specialise in life insurance was the Annuity Association, founded by the Rev. Dr. Assheton on the 4th October 1699. Unfortunately, this company was forced to close its doors 46 years later, owing to bankruptcy.


The world’s oldest surviving mutual insurer is Equitable Life Assurance Society, which was founded in 1762. It pioneered age-based premiums based on mortality rate and created the basic foundations for modern life insurance. Life insurance policies are now subsequently based on its primary framework.


The Life Assurance Act 1774 was an act of the Parliament of Great Britain. The Act prevented the abuse of the life insurance system by requiring claimants to have a legitimate financial interest in the life of the insured. It was extended to Ireland by the Life Insurance (Ireland) Act 1866, and is still in force.


Today the life insurance industry is a highly competitive marketplace and is much more diversified to provide for individuals needs; offering products such as term insurance and over 50s life insurance. Whilst times have changed and protection is no longer focused around preventing miserable ghosts or used as a form of gambling, the fundamental ideals of protecting against risk and adversity are still rooted in today’s life insurance policies.

Note: Whilst we take care to ensure Hub content is accurate at the time of publication, individual circumstances can differ so please don’t rely on it when making financial decisions. OneFamily do not provide advice so it may be worth speaking to an independent financial advisor about your own circumstances.