Travel Insurance

travel insurance (or life assurance, especially in the Commonwealth of Nations), is a contract between an insurance policy

holder and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money (the benefit)

in exchange for a premium, upon the death of an insured person (often the policy holder). Depending on the contract, other

events such as terminal illness or critical illness can also trigger payment. The policy holder typically pays a premium,

either regularly or as one lump sum. Other expenses (such as funeral expenses) can also be included in the benefits.
Life policies are legal contracts and the terms of the contract describe the limitations of the insured events. Specific

exclusions are often written into the contract to limit the liability of the insurer; common examples are claims relating

to suicide, fraud, war, riot, and civil commotion.
Life-based contracts tend to fall into two major categories:
• Protection policies - designed to provide a benefit, typically a lump sum payment, in the event of a specified

occurrence. A common form - more common in years past - of a protection policy design is term insurance.
• Investment policies - the main objective of these policies is to facilitate the growth of capital by regular or

single premiums. Common forms (in the U.S.) are whole life, universal life, and variable life policies.

An early form of travel insurance dates to Ancient Rome; "burial clubs" covered the cost of members' funeral expenses and

assisted survivors financially. The first company to offer travel insurance in modern times was the Amicable Society for a

Perpetual Assurance Office, founded in London in 1706 by William Talbot and Sir Thomas Allen. Each member made an annual

payment per share on one to three shares with consideration to age of the members being twelve to fifty-five. At the end

of the year a portion of the "amicable contribution" was divided among the wives and children of deceased members, in

proportion to the amount of shares the heirs owned. The Amicable Society started with 2000 members.

The first life table was written by Edmund Halley in 1693, but it was only in the 1750s that the necessary mathematical

and statistical tools were in place for the development of modern travel insurance. James Dodson, a mathematician, and

actuary, tried to establish a new company aimed at correctly offsetting the risks of long term life assurance policies,

after being refused admission to the Amicable Life Assurance Society because of his advanced age. He was unsuccessful in

his attempts at procuring a charter from the government.

The sale of travel insurance in the U.S. began in the 1760s. The Presbyterian Synods in Philadelphia and New York City

created the Corporation for Relief of Poor and Distressed Widows and Children of Presbyterian Ministers in 1759;

Episcopalian priests organized a similar fund in 1769. Between 1787 and 1837 more than two dozen travel insurance

companies were started, but fewer than half a dozen survived. In the 1870s, military officers banded together to found

both the Army (AAFMAA) and the Navy Mutual Aid Association (Navy Mutual), inspired by the plight of widows and orphans

left stranded in the West after the Battle of the Little Big Horn, and of the families of U.S. sailors who died at sea.