Mass migration to the disease-ridden cities of Victorian England sent death rates soaring. One in five babies died before its first birthday, and at the turn of the century life expectancy in London was just 21.
But it was fear of dissection rather than of death which sent sales of penny policies soaring.
Before the 1832 Anatomy Act, hospitals were allowed only eight bodies a year for medical experimentation. A lucrative trade in body-snatching developed. The Anatomy Act sought to put an end to this trade by giving hospitals access to as many bodies as necessary for their work. But the corpses to be sacrificed for science were the ones which no one could afford to bury.
To religious people, this meant eternal damnation. But while labourers earned barely pounds 1 a week in the late 19th century, the minimum cost of the cheapest funeral was pounds 6. A man with 10 or 12 children could expect four out of five of them to die during childhood, yet he had no means of burying them. As late as 1938 in London, one in nine people to die received a pauper's funeral.
Insurance companies sprang up to meet this need. Liverpool Victoria was established in 1842 to "afford the poorer classes the means of providing themselves and their children a decent interment for a half-penny, a penny or three pence a week". The Pearl and Prudential quickly followed.
Insurers were not entirely motivated by profit. If someone stopped paying premiums because they had entered the workhouse, then the company paid for them and they were guaranteed a decent funeral.