There are multiple sources, the most likely seem to be the idea that a serviceman's life insurance would pay off the mortgage in the event of his death.
-rivalarrival (79Q / 1411A)
Sat Sep 27, 2008 9:37am
origin of this phrase is uncertain. Itz 20th century & all early references to it relate to US military. The New York Times Magazine, March 1954, had a related phrase, in glossary of jet pilots' slang:
"Bought a plot, had a fatal crash."