Insurance is about mitigating risk. Throughout history, every insurance idea arose from the financial loss and devastation caused by real life experience. For example, life insurance may have had its roots in Ancient Rome.
The Ancient Romans had strong beliefs associated with burials. If not done correctly, the result would be tortured spirits for an eternity. Thus, they were prone to invest large sums of money in a proper burial. Since many Roman citizens lacked the resources to pay for elaborate funerals, “burial clubs” were created.
Members met for the payment of the contributions, and each club may have had something in common, whether it be a common ancestor, or a common craft or trade.
Today, we make payments to an insurance company for pretty much the same reasons as those ancient Romans did – to cover the costs associated with death.
Hazel Fluke, Financially Speaking 