Life Insurance For Farmers: Is It Worth The Harvest?

Life insurance is a tricky topic. It provides financial support to your loved ones after you pass away. Farmers Insurance offers several types of life insurance coverage, including term life and permanent life insurance (which includes whole life and universal life). Term life insurance provides coverage for a specific period, while permanent life insurance offers lifelong protection and builds cash value over time. Whole life insurance guarantees level premiums and death benefits, while universal life insurance provides more flexibility. Farmers Life Insurance has been around for over 100 years and is a trusted choice for many.

Whole Life Insurance

• Your premium never increases and is guaranteed to remain level for the life of the policy.
• The death benefit is generally income-tax-free and goes to the person or people you name as beneficiaries.
• Your policy builds cash value that grows at a guaranteed rate as long as premiums are paid on time. This cash value can be accessed during your lifetime or surrendered for the available cash value if you cancel the policy.
• Whole life insurance provides lifetime coverage, in contrast to term life insurance, which only provides coverage for a specific amount of time.
• Whole life insurance premiums are typically higher than term life insurance premiums. Therefore, it may be more cost-effective to purchase a term life policy for short-term needs and only buy whole life insurance for long-term needs.

Farmers Insurance offers two types of whole life insurance: Farmers EssentialLife Simple Whole Life and Farmers Graded Benefit Whole Life. EssentialLife Simple Whole Life is available for individuals aged 15 days to 80 years, with proceeds paid up to age 121. It offers a guaranteed death benefit, and premiums remain level throughout the policy. Graded Benefit Whole Life is designed for individuals aged 18 to 80 who may have health issues but are still able to care for themselves. It also offers level premiums and a guaranteed cash value accumulation but features a graded death benefit. This means that if the policyholder dies of natural causes within the first two years, their beneficiaries will receive a payout equal to 110% of the premiums paid.

Universal Life Insurance

Key Features of a Universal Life Insurance Policy

• The ability to accumulate cash value that earns interest, generally tax-deferred
• Access to the cash value during your lifetime for any reason, generally income-tax-free
• The policy lasts your lifetime (as long as sufficient premiums are paid)
• The policy pays your beneficiaries a lump sum that is generally tax-free, known as the death benefit
• You can choose whether the death benefit is a fixed amount or increases with your policy's cash value

When you make a premium payment on a universal life policy, most of that payment is allocated to your policy's cash value. The cost of keeping the policy in force is subtracted from that cash value every month. The length of time you choose to pay your premiums and the amount you pay determines how much cash value your policy can accumulate. You may be able to increase the death benefit, and you may be able to lower or even stop your premium payments in the future if the policy has accumulated sufficient cash value.

The monthly cost of keeping a universal life policy in force depends on several factors, including your age (as you get older, the cost of insurance goes up), your health, whether you smoke, and the size of the death benefit you want. You choose how much premium to pay, within contract limits.

Who Is Universal Life Insurance Best For?

Because universal life insurance offers flexibility—to change premiums or the amount of coverage—it may be a good option if you want coverage to last the duration of your life. It might also be useful if you have big, long-term savings goals and need both life insurance and an accumulation vehicle to meet them.

Types of Universal Life Insurance Policies

Term Life Insurance

The cost of term life insurance depends on several factors, including the amount of insurance you choose, how long you want your premiums to remain level, your age, health, and other risks in your life. Coverage can start for as little as $15 per month for a healthy young adult who doesn't smoke.

If you outlive the term of your policy, it will end, and you will no longer owe premiums or have coverage. However, some insurers offer the option to convert your term life insurance into a permanent policy, such as whole or universal life insurance. This can be advantageous as you won't need to qualify for the new policy based on your health and other risk factors.

Farmers Insurance offers term life insurance policies, including Farmers Simple Term and Farmers Value Term. Simple Term is available for individuals aged 18 to 65 and usually doesn't require a medical exam. Value Term offers level premium costs throughout the policy and is available to those aged 18 to 75 but does require a medical exam.

Permanent Life Insurance

Farmers Life Insurance offers whole life insurance, which is a type of permanent life insurance. This insurance is designed to last your entire lifetime, and as long as you pay the premiums, your beneficiaries will receive a payment based on the amount of your coverage. Whole life insurance policies have a set premium that is guaranteed never to increase and is based on the amount of coverage you want, as well as factors like your age, health, and risk factors like smoking.

Whole life insurance policies can also accumulate cash value over time, which can be used during your lifetime. This cash value is guaranteed to accumulate as long as premiums are paid on time. If you need money, you can use the available cash value, and if you cancel the policy, you will get back the available cash value.

The death benefit from a whole life insurance policy goes to the person or people you name as beneficiaries and is generally income-tax-free. This benefit is guaranteed as long as the premiums are paid.

Whole life insurance is a good option for those who want coverage for their entire lives and want the peace of mind that comes with guaranteed premiums, death benefits, and cash value accumulation. It may be particularly relevant for those with lifelong dependents, such as a child with disabilities, or those who want to leave a legacy for their heirs.

Life Insurance for Farmers' Customers Over 80

Farmers Life Insurance offers several types of life insurance coverage, including term life insurance and permanent life insurance. Permanent life insurance includes whole life insurance and universal life insurance.

Term life insurance is often the least expensive option, providing coverage for a specific period without increasing costs. It provides a death benefit as long as premiums are paid until the policy term expires. Permanent life insurance, on the other hand, offers lifelong protection and can be useful for those with lifelong dependents, such as a child with disabilities, or those who want to leave a legacy for their heirs.

Whole life insurance provides permanent coverage with guaranteed level premiums, death benefits, and cash value accumulation. Universal life insurance is also permanent but offers more flexibility, allowing changes to be made according to the policyholder's priorities.

When considering life insurance, it's important to evaluate your financial goals and needs. Life insurance is intended to provide financial support for your loved ones after your passing, helping them with expenses such as mortgage payments, utility bills, taxes, and college tuition. It can also assist with final expenses and debts.

While Farmers Life Insurance does not specify an age limit for their policies, it's important to note that age is a factor that can affect the cost of life insurance. Generally, the younger and healthier you are when you purchase life insurance, the more affordable the rates tend to be. Therefore, it is advisable for those over 80 to carefully review the different options available and consult with a Farmers agent to determine the most suitable coverage for their specific needs and budget.

Frequently asked questions