You are reading a page from Early life insurance marketing brochures (1900's-1920's)
Part of the American Term Life Insurance History Project
Term Life Insurance

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Life
Insurance

vs.

Government
"Bonds

As a
Business
Proposition.


  Copyright 1905 by The Insurance Educator Co..
           Louisville, Ky.
Life Insurance Vs. Government
           'Bonds.

IT IS generally admitted that a govem-
           ment bond is an excellent form of
          security, and this comparison is not in-
          tended to exploit any different opin-
ion.   Yet, strange as it may seem at first, a gov-
ernment bond does not possess one single advant-
age not possessed by a life insurance policy,
while on the other hand, life insurance policies
possess many advantages over government bonds.
  A government bond is not taxable, neither is
a contract of life insurance.
  A government bond is safe, a life insurance
policy is just as safe.
  A government bond must be paid for in full
when bought, a contract of life insurance can be
paid for in installments.
  A 2 per cent government bond sells at a pre-
mium, a life insurance policy earns in excess of
that with compound interest and is sold at par.
  The longer a government bond bought at a
premium, is held the less it is worth, since it
goes toward par as maturity approaches; the
older a life insurance policy, the more it is worth.
  Interest on a government bond must be taken
every year which necessitates continuous work of
reinvestment  if  compound  interest  is  to  be
secured; accumulations under a life insurance
contract may be left with a company and com-
pound interest will accrue.
   There is no chance of selling a government
bond for more than it cost. except for possibly a
small extra premium on account of market fluc-
tuation; there is a possibility that a life insurance
policy will return a great many times the amount
paid for it.
  A government bond can be used as collateral
security for a loan; money can be borrowed on
a life insurance policy from the company which
issued  it,  making  it  unnecessary  to  request
any banker or other money lender for the accom-
modation.
  In 1893 loans were refused by banks though
government bonds were offered as security, as
they had no money to loan on anything, at the
same time every life insurance company made all
loans which were called for on their policies  as
per agreement.
  In only two points mentioned is a government
bond on an equal footing with a policy of life
insurance; on all other points a life insurance pol-
icy has the advantage.   One reason why some
buy government bonds, instead of life insurance,
is because they can  not  secure  life  insurance.
Those financially and physically able should at
once secure some form of this most desirable in-
vestment which, so clearly, is  more preferable
than even a government bond.