INSURANCE

Because of the risks involved in overseas trade, Greek and Roman merchants entered into arrangements with moneylenders that amounted to a form of insurance, although it was very different from insurance as it is known today. A merchant purchased goods for export using some of his own money and an equal amount borrowed from a lender. The merchant then paid the lender a fixed sum of interest (usually

20 to 30 percent of the amount borrowed) before he was allowed to recover his investment or make a profit on the goods sold. Even if the ship or the entire cargo was lost, the lender was assured of getting some of his money back, and the merchant was protected from having to repay the entire loan.

During the Roman Empire, private citizens occasionally formed burial associations that were similar to modern forms of life insurance. A member of the association paid an admission fee and monthly dues. Upon his death, the association paid his funeral expenses, and his estate received a payment. Such associations relieved the member’s anxiety that he might die without a proper burial or without being able to provide financially for his family after his death. (See also Banking; Economy, Greek; Economy, Roman; Money and Moneylending; Trade, Greek; Trade, Roman.)

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