International Styles

Life Insurance Facilitates the Purchase of a Home

While this advantage may be considered essentially a business one, it is mentioned here because of the enormous volume of outstanding mortgages on homes and the direct bearing of this situation in nearly all cases upon the welfare of the mortgagor's family. One who has purchased or built a home with funds borrowed on a mortgage which provides for payment at a specified date is exposed to the danger of dying before a fund sufficient for such payment has been accumulated. Let us assume that the head of a family has mortgaged his home for $5,000 and expects to pay off the same through a series of payments at fixed intervals, such payments being made out of current earnings. It is apparent that the fulfilment of this purpose is dependent upon the mortgagor living long enough to earn the amounts necessary to make the periodic payments. Premature death, however, after only a few payments have been made, may seriously jeopardize the welfare of the family, since the remaining members of the household may be unable to effect a settlement of the mortgage and thus prevent a foreclosure on their home at a time when troubles are amply abundant. Here life insurance, involving only a moderate cost, affords an excellent protection against such a contingency. A $5,000 life-insurance policy may be taken out by the mortgagor to hedge his $5,000 mortgage. If his life is spared he will pay off the mortgage and because of a little extra thrift, will also be the holder of $5,000 life insurance, the beneficent purpose of which as family protection will by that time be appreciated. If death, however, should occur when only $1,000 has been paid on the mortgage, the proceeds of the policy become immediately available for the extinguishment of the balance of $4,000. The family thus becomes possessed of full title to the home, while the balance of $1,000 of life-insurance money will prove exceedingly welcome as a means of tiding over the period of adjustment that nearly always arises when the breadwinner is removed by death.

The same situation also presents itself on every hand among the large farmer and retailing classes of the country. Here a vast volume of mortgages covers the farms and small retail establishments in which the mortgagors' families have a vital interest. Foreclosure of the property in case of failure to meet the mortgage because of the mortgagor's untimely death, or serious hardship on the part of the heirs in attempting to pay off the mortgage, can easily be obviated through the use of life insurance. The possibilities of the spread of life insurance among the farmers of this country are exceedingly great, because as a class they stand sadly in need of its protection and at present know comparatively little about its usefulness.

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