Burying someone isn't cheap. It wasn't like that in the nineteenth century. Those who could not afford a funeral received a very shabby funeral from the municipality. To avoid this disgrace, poor people took out insurance with a funeral fund. However, fraud was lurking.
Funeral funds are a typical phenomenon of the nineteenth century. Before the abolition of the guilds – after the Batavian Revolution around 1795 – funerals were a more public affair. Craftsmen were compulsory members of the guild. You had all kinds of different guilds, from the artists' guild to the bakers' guild.
A guild checked the quality of the products and their makers, determined the right prices and also took care of their members and their families in case of illness and after death. The funeral was organized and paid for by the guild. All guild brothers were present for a final tribute, the people from the neighborhood and of course the family.
Trust is the foundation
With the disappearance of the guilds at the end of the eighteenth century, care for deceased members also disappeared. The poorest in particular could not afford a funeral themselves. And poverty was great among the exploited factory workers in the nineteenth century. A little decent funeral soon cost 50, about the same as two months' wages for a labourer. If you didn't have the money, the municipality provided a funeral 'of the poor'. The cheapest coffin, a grave in a corner afterwards between the other slobs and a funeral that only took place early in the morning. Such an end was experienced as a shame for the relatives. Funeral funds filled this gap with cheap insurance.
It started with single-players who recruited their customers themselves. To spread the costs for the poor members, they collected a weekly contribution of about a dime per person. It was therefore important for these funeral fund companies that all the people from whom they had to collect the contribution lived near each other or in the city, otherwise it would not be logistically feasible. The roads were bad and there was no public transport as we know it today. The fastest was the tow barge. But even in that way it took a few hours before you were in the neighboring town.
When things went well, a funeral fund could hire ushers, men who collected the dues for them. It was important for these men to be trustworthy, not only for the money they raised, but also for persuading new people to join. The contributions were in fact quite an expense for poor people, who desperately needed their meager income for food, rent and other basic necessities. The ushers therefore often came from the same neighborhood as where they collected the contributions. The members had a closer relationship with the messenger who came by at the same time every week than with the fund itself.
Making children for benefits?
The advantage of the benefit in the event of the death of a family member outweighed the disadvantage of the contribution costs. The number of funeral funds increased rapidly. A survey from 1890 by the Maatschappij tot Nut van't Algemeen (Nut for short) shows that about half of the Dutch population had taken out insurance for funeral expenses. This percentage was not evenly distributed across society:among the poor it was a lot higher than the fifty percent because of the low life expectancy of their children.
Half of the children died before their first year of life because of poor food and poor hygiene in impoverished slums. The open canals in the cities served as sewers and infectious and deadly diseases such as cholera were rampant here. In addition, the women also had to work so that babies were not breastfed. If children did make it to their first year, they had to start working at an early age:five years was no exception. The poor and often dangerous conditions in the factories claimed victims.
Among other things, Het Nut conducted research into child mortality because it was afraid that parents intentionally had children with the aim of insuring them and then killing them for the funeral allowance. But this study found that neglect among children of poor fund members was no worse than among children of poor parents without insurance with a funeral fund. So the high death rate among children had nothing to do with insurance…
Serial killer cheats with funds
Yet fraud did occur. The ushers, the men who came to collect the money and pay the benefits, sometimes had a crooked skate. They pocketed part of the benefit, or they registered a member twice so that the messenger could keep one of the two premiums in the event of death. But on the other hand, they regularly paid out when it shouldn't be necessary according to the regulations. They wanted to avoid a bad name in the neighborhood so as not to lose (future) customers.
Herders also sometimes turned a blind eye to the mandatory medical examination at the payout or allowed new members to be enrolled by people who were not related. Especially the last two situations could lead to fraud and even murder. It meant that someone could insure you without your knowledge and could collect the benefits after your death without the need for a medical examination or death certificate from the doctor.
One of the Netherlands' most famous serial killers, the Leiden folk woman Maria Swanenburg, has poisoned relatives and acquaintances from her environment for years in order to subsequently collect the benefits from the funeral funds. This 'Good Mie' has killed 27 people. Not only did she pay contributions for several people without their knowledge, the insurance carriers didn't find this annoying at all. It saved them from walking around again. Mie also managed to get some insurance policies paid out by deceased relatives without having to hand over a death certificate and for which she had not paid the contributions herself.
It was not uncommon for poor people to insure themselves with several funeral funds in order to pay for a more luxurious funeral. But upon death, the family only received a single death certificate and they could only hand it over to one fund. It was also possible to take out insurance for a higher class in order to be able to pay for your more luxurious funeral. This only happened rarely because the inspections were stricter and the ushers ran a greater risk that poor people could not pay the higher contribution.
Down to popularity
At the end of the nineteenth century, funeral funds went wrong. The amount determined for the contribution and the death benefit was just a guess and not based on statistical data. With more and more members and an aging membership, the risk that the ushers could not pay the benefits grew. Many small funds in particular went bankrupt and the members lost everything.
From 1880 the national insurance schemes became popular because people could insure small amounts here. The corresponding premiums were determined on the basis of mortality rates, which meant that these insurance companies had a much lower risk than the old-fashioned funeral funds. The latter had to adapt and went into the new, much larger, insurance companies or went bankrupt. The time of the personal one-man funds was over.