Farmers Life Insurance: Is It A Good Choice?

Life insurance is a tricky topic. It provides financial support for your loved ones after you pass away. Farmers Life Insurance Company helps individuals in all stages of life and at all levels of wealth to implement smart planning strategies that can provide comfort and protection and a sense of confidence for the future. They offer several types of life insurance coverage, including term life insurance and permanent life insurance (whole life insurance and universal life insurance).

Financial support for your family

Farmers Life Insurance Company offers financial support for your family or chosen beneficiaries after your death. The company provides resources and support to help improve your financial outlook and offers several types of life insurance coverage to meet your needs.

One option is term life insurance, which is often the most affordable choice. This provides coverage for a specific period, such as while your children are in college or you have a mortgage. It offers a death benefit as long as premiums are paid until the policy term expires. Another option is whole life insurance, which provides permanent coverage with guaranteed level premiums and death benefits. Finally, universal life insurance is also permanent but offers additional flexibility to adapt to changing priorities.

When choosing a life insurance policy, it's important to consider your financial and personal situation. Ask yourself how much debt your loved ones would have to pay, how much of your income goes towards supporting them, and what financial obligations you want the policy to cover. You should also think about whether you have any lifelong dependents, such as a child with disabilities, and how much money you might need for final expenses like medical bills and funeral costs.

Farmers Life Insurance can help you navigate these decisions and provide peace of mind that your loved ones will be taken care of financially, no matter what life stage you're in or your level of wealth.

Whole life insurance

One of the key features of whole life insurance is that the premium remains level throughout the policy's duration and never increases. Additionally, the death benefit is guaranteed and is generally income-tax-free for the beneficiaries. The policy also accumulates cash value over time, as long as premiums are paid on time, which can be accessed and used by the policyholder during their lifetime. If the policy is cancelled, the available cash value is refunded to the policyholder.

When considering whole life insurance, it is important to evaluate your financial goals and needs. Factors such as age, health, and risk factors like smoking can influence the cost of the policy. Additionally, it is worth noting that whole life insurance tends to be more expensive than term life insurance, so combining the two types of policies for short-term and long-term needs may be a more cost-effective approach.

Farmers Life Insurance offers whole life insurance policies with guaranteed level premiums, death benefits, and cash value accumulation. Their EssentialLife® Simple Whole Life plan is a popular choice, featuring a simplified application process and coverage ranging from $15,000 to $250,000.

Universal life insurance

One of the key advantages of universal life insurance is its flexibility. Policyholders can adjust their premiums and death benefits to fit their changing needs and circumstances. The premiums consist of two components: the cost of insurance (COI) and the saving component, known as the cash value. The COI is the minimum amount required to keep the policy active and covers the charges for mortality, policy administration, and associated expenses. The cash value earns interest and can be used for anything, such as emergencies, home repairs, or investing in a business.

However, it's important to note that universal life insurance has fewer guarantees than whole life insurance. If you make minimal premium payments for too long, it can impact the cash value growth and the size of your death benefit. Additionally, if your investments underperform or you underpay for an extended period, it could affect your death benefit or cause your policy to lapse.

When choosing between universal life and whole life insurance, it's important to consider your goals and needs. Both options provide lifelong coverage and allow you to build cash value. However, universal life offers flexible premiums, while whole life has set premiums. Whole life insurance also offers guaranteed death benefits and cash value growth, whereas universal life provides flexible death benefits.

Term life insurance

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

If you outlive the term of the policy, it simply ends, and you no longer owe premiums or have coverage. However, it's important to carefully review the policy provisions to understand the exact term and any potential increases in cost after the level premium period.

Farmers Insurance does have some limitations when it comes to term life insurance. They do not offer term life insurance after age 65, and their term lengths are more constraining than those of other companies. Additionally, Farmers has a higher minimum amount of term coverage available, starting at $150,000, which may not be suitable for those seeking lower coverage amounts.

Permanent life insurance

Farmers Life Insurance Company offers permanent life insurance in the form of whole life insurance and universal life insurance. Permanent life insurance is a good option for those seeking lifelong coverage and the ability to address specific financial and personal situations.

Whole Life Insurance

Whole life insurance is a type of permanent life insurance that provides financial support for beneficiaries after the policyholder's death. It is designed to last a lifetime, meaning that as long as the policyholder pays their premiums, their beneficiaries will receive a payment based on the amount of coverage chosen. Whole life insurance typically has the most guarantees from the insurance company, including guaranteed level premiums, a guaranteed death benefit, and guaranteed cash value accumulation. The premium rates never increase and are based on factors such as age, health, and risk factors like smoking. Whole life insurance policies can also accumulate cash value, which can be used by the policyholder during their lifetime or left to their beneficiaries.

Universal Life Insurance

Universal life insurance is another type of permanent life insurance that offers more flexibility than whole life insurance. It allows policyholders to pay more than the premium, with the additional amount added to a separate account and contributing to the cash value. Policyholders can also choose whether the death benefit remains level or increases by the available cash value of the policy, within policy limits. Universal life insurance provides permanent coverage and the flexibility to change with the policyholder's priorities.

When to Choose Permanent Life Insurance

Frequently asked questions