How Term Life Insurance Began in Iowa?

If you find yourself in Mount Vernon, Iowa, then you will be in the town that’s home to a not very famous college; Cornell College. It is an airy-fairy arts college, founded by Reverend Fellows in 1853 and later renamed after William Wesley Cornell, an iron tycoon.
Willy Cornell was in fact a distant relative of Ezra Cornell, founder of the educational institution people have actually heard of; Cornell University, in New York state. Ezra’s fortune was not made from iron, but rather term life insurance, a concept conceived by Ezra.

Iowans hate this guy for overshadowing their beloved institution with his far superior one. So what made Ezra Cornell’s college so much better? The answer is simple; Ezra had far more money than Willy.

Ezra’s fortune was made in the early 1800’s when he started to offer term life insurance as a form of life coverage. He noticed that many Americans were declining the security of life coverage because the plans had high premiums that only increased with time, they simply weren’t affordable.

Ezra revolutionized life insurance by offering people fixed amounts of time instead of until death. The rates were much cheaper than whole life and almost within an instant; it became the choice of Americans.

Ezra’s scheme was so delightfully simple that it required little change. Of course, in today’s technological revolution one can now browse online to make sure they get the best deal.

Willy killed himself in the fall of 1860. His words were scrawled on a note which detailed his mentally crippling obsession with Ezra and Cornell University (not college!). He unsuccessfully tried to burn his own college down before taking his own life by jumping headfirst from the bell tower of the college’s chapel.

There now sits a memorial to Willy Cornell in the grounds of the chapel at Cornell College, Iowa but no one ever visits it and even if they did, no one would know who he was. The irony of the story is that term life coverage was originally Willy’s idea, but he let Ezra have it to concentrate on his iron business. It seems striking while the iron is hot is not always the adage to live by!