Responsibility is the best policy

THE concept and practice of insurance originated thousands of years ago and remains vibrant to this very day. What accounts for its endurance? Two aspects of human nature explain this. First, we are inherently risk-avoiders. Long ago our ancestors recognized that natural perils could not be eliminated, but their financial consequences could be mitigated. Ancient merchants, for instance, would pay a hefty interest on a loan that they did not have to pay back should their cargo get lost at sea, and thus marine insurance was born.

This same aversion to risk of financial loss eventually expanded to include people. During Greek and Roman times, families of soldiers organized “benevolent societies” and established a common fund that paid burial expenses and extended financial assistance to widows and orphans whose breadwinners passed away. This was the forerunner of life insurance and reveals another important aspect of our human nature, which is responsibility. Without a sense of responsibility, we wouldn’t be at all concerned about the welfare of our loved ones after leaving our earthly cares behind.