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When I was a child in the early 1900s, most working-class people had life insurance because it was a dreadful stigma for there not to be enough money for a proper funeral. Then the person would have to be buried by the parish, and the wage-earner in the family would be designated as a pauper. Although there were degrees of pauperism, the result could be that the entire family would end up in the workhouse.
The insurance for new babies started as soon as they were born with what was called a penny policy.
The following additional information is extracted from the book Round About a Pound a Week which records the findings of a group of women who interviewed families of manual workers in a poor part of London in 1909-1913 under the auspices of the Fabian Society. (Judging by the weekly menus and the living accommodation that the book describes in comparison with what my mother describes in the newer Victorian terraces, the take-home pay for families in other parts of London must have been slightly more.) The aim of the study was to look at how these poor families managed financially, and although the findings were hugely influential for improving state support for families, that is another story.
To put the costs of funerals in context, the wage-earners in the study, i.e. the men, were in regular work - or at least as regular as could be expected at the time. They were not skivers. Sometimes they were laid off because there was no work for them to do and occasionally they were paid overtime. Most of their money was given straight to their wives for housekeeping and rent, although some men kept back a small amount for themselves. Their take-home pay was about £1 a week. How the money was spent depended on the size of the family and the rooms that they were renting. The book lays various accounts out in detail, but the point at issue here is the relatively large proportion that went on saving for funerals.
The stigma of a pauper's burial was so great that families would go without food and heating in order to put by a penny a week for each child, two for the mother and three for the father towards funeral expenses. The cost started hitting harder as soon as the first child was born, and it hit progressively harder with more children. (Wages did not increase with family size.) Families could expect one or more of their children to die in these times.
Particularly sad was that these regular payments did not attract any interest. In that part of London, they went into what was known as a Funeral Club rather than a Life Insurance policy, and 13 pennies had to be paid to the club before any benefit could be claimed. So the cost of a funeral of a young baby had to be born entirely by the family. A penny a week just covered the funeral expenses of a child as he or she grew older.
Also sad was that a family may have paid into the club for years, but if the wage-earner fell ill or could not work for any other reason, and could not continue to pay into the club, the entire benefit was lost. Then all those valuable pennies were wasted.
I feel the sadness personally in that know that my mother had a penny policy, taken out by her parents when she was born in January 1906 and which she continued when she started work at 14. Yet when she died in 2002, I had no idea where the documentation was or if it was up-to-date. So all those hard-earned pennies with their then significant buying power were entirely wasted. This doubtless happened in many families.
The cost of an adult funeral was about two weeks pay in that part of London, ie about £2. A baby or small child could be buried for less, while the body was small enough to go under the box seat of the driver.
Having to pay out for a funeral was a fear that was always with families, in that it so often put them into debt and rent arrears. The book points out that the money would have been better spent feeding the children better so that they would be less likely to die but that "shame was worse than hunger". Neighbours along an entire street would contribute to a funeral collection, normally on a loan basis, rather than suffer the pauperisation of one of themselves. Apparently they were always repaid at the cost to the wife and children of the bereaved family in terms of less food - not for the husband who had to stay well enough to keep the wages coming in.
The following is a particularly poignant quotation from the book:
The three year old daughter of an out-of-work carter died of tuberculosis. The father, whose policies had lapsed, borrowed the £2-5-0 necessary to bury the child, The mother was four months paying off the debt by reducing the food of herself and the five other children, The funeral cortage consisted of one vehicle in which the little coffin went under the driver's seat. The parents and a neighbour sat in the back of the vehicle. They saw the child buried in a common grave with 12 other coffins of all sizes, "We 'ad to keep a sharp eye out for our Ede," they said, "she were so little she were almost 'id."
The following is one example from the book showing the cost of burying another child who died of cholera.