316 FARM MANAGEMENT 



one dependent on him, he should be sure to carry enough 

 insurance to protect his family in case of death. There 

 are several forms of life insurance. Some of the more 

 common forms are, (1) renewable or convertible term, (2) 

 ordinary life, (3) limited payment life, and (4) endow- 

 ment policies. 



(1) The renewable term is the cheapest form of life 

 insurance for a short time. If one needs more insurance 

 than he can readily pay for, it is a good form to take 

 out temporarily. With this form one pays a certain 

 premium for a definite number of years. If this policy 

 is continued, the amount to pay is increased from time 

 to time. During the time that the policy is in force it 

 may be changed to one of the other forms by paying at 

 the proper rate for the age at that time. This is a higher 

 rate than would have been charged at the beginning, be- 

 cause one is then older. 



(2) The ordinary life requires the same payment yearly 

 so long as one lives. But the dividends allowed by most 

 companies act to reduce the amount of the payment year 

 by year so that the amount usually decreases. This is 

 usually the best form of insurance for one who has a good 

 place to invest money safely at a rate of interest above 

 3| per cent, provided he has the strength of character to 

 save money. 



(3) The twenty payment life or other limited payment 

 policies call for a still larger premium. One pays enough to 

 pay the yearly premium and enough more to be put at 3 

 or 3^ per cent interest so that by the end of the twenty 

 years the accumulated excess and interest on it will pay the 

 future premiums. If one takes out an ordinary life policy 

 and puts the difference between the payments on this and 

 on a twenty payment policy in a savings bank and con- 



