What is life insurance?
Life insurance provides financial support for your family or other loved ones — anyone you choose — if you pass away. The simplest way to explain how life insurance works: you pay premiums, and, in exchange, your insurance company will pay a death benefit to your qualified beneficiaries after your death.
What are the different types of life insurance?
Farmers Life® offers several types of life insurance coverage:
Term Life Insurance
Often the least expensive life insurance to start, it provides coverage for a specific period of time without increasing cost and provides a death benefit as long as you keep paying premiums until the policy term expires.
Whole Life Insurance
Permanent life insurance with guaranteed level premiums, guaranteed level death benefit2, and guaranteed cash value accumulation.
Universal Life Insurance
Permanent life insurance with additional flexibility to change with your priorities.
What type of life insurance do I need?
No single type of life insurance policy is the best for everyone. You can choose a policy to address your own financial and personal situation.
You may want to consider term life insurance if:
- Affordable coverage is a primary goal.
- You want coverage for a specific period of time. For example, to provide for your loved ones if you die while your children are in college (to pay tuition) or while you have a mortgage (to help pay the loan).
- You want to leave an inheritance or money for funeral costs or other final expenses.
You may want to consider permanent (whole or universal) life insurance if:
- You have a lifelong dependent, such as a child with disabilities.
- You want to leave a legacy for your heirs to help pay estate or inheritance taxes.
- You want the option of using the available cash value to help:
- Pay for large purchases or settle expensive debts
- Pay medical bills during an illness
- Save or pay for college
- Provide financial support to loved ones in a time of need, or
- Cover caregiving expenses, like time off work to help a family member
Other types of coverage
Medical bills
Medical payments to others coverage provides limited coverage for medical costs if someone outside your household is injured on your property, no matter whose fault it is.
Example: If a neighbor’s child breaks his arm while playing in your yard, this coverage could help pay for the trip to the emergency room.
Guaranteed replacement cost
In a time of escalating construction costs, if you have a covered loss, this optional coverage guarantees payment for the full cost to repair your home, even if it exceeds your policy limits.
Example: A tornado rips through your home, requiring a full rebuild. Your dwelling limit is $250,000 but lumber and construction labor push rebuilding costs to $300,000. This coverage can pay the difference.
Personal Umbrella coverage
Personal umbrella insurance provides additional liability coverage, in $1 million increments up to $10 million, over the liability limits in other policies you already have and for unusual risks that aren’t covered by your other policies. It can help protect your assets from lawsuits.
Example: A guest trips over a toy your child left in a hallway. He won’t be able to work for some time due to the injury, and the liability limits of your home insurance may not be high enough to cover his medical bills and other compensation. Umbrella can help cover the difference.