Life Insurance
Are you protecting your loved ones financially? Life insurance can be the final act of love for your family after you pass away.
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.
Selecting life insurance coverage
Young professionals, busy families, retirees, business owners — no matter where you are in life, thinking about your short- or long-term financial goals often comes with questions. For some, life insurance may be a simple answer.
Types of life insurance
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Term life insuranceProvides 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 expires1. |
Whole life insuranceLasts your lifetime2, which means that as long as you pay your premiums, your beneficiaries will receive a payment based on the amount of your coverage. |
Universal life insuranceLike whole life, designed to last your lifetime2 as long as you pay your premiums but comes with more options for flexibility while your policy is in effect. |
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What type of life insurance do I need?
You can choose a term or permanent (whole or universal) life insurance policy to address your own financial and personal situation.
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Term life insuranceMay be ideal for you if: |
Permanent life insuranceMay be ideal for you if: |
- More 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.
Frequently asked questions
How much life insurance do I need?
To figure this out, start by considering a few questions:
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How much debt (e.g., mortgage, car loan, credit card) would your loved ones have to pay if you died?
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How much of your income is used to help support loved ones?
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What financial priorities or obligations do you want life insurance proceeds to cover?
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Do you provide financial support for someone who depends on your income, such as a child with a disability or a spouse? How much, and for how long?
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How much might be needed to pay medical bills, funeral costs or other final expenses?
Some people use a rough rule of thumb to determine an amount, like seven to 10 times your annual income.
How much does life insurance generally cost?
Several factors can affect the cost of your life insurance policy — including your age, general health, whether you smoke and the type of policy you’re interested in.
(For more details, see What Factors Should I Consider When Evaluating Life Insurance Coverage and Cost?) Your agent can also walk you through coverage options and life insurance costs.
What should I consider before buying life insurance?
Start by thinking about where you are in your life and what goals or needs you want to meet with your life insurance benefit. Whether you’re a young professional, a business owner, a soon-to-be retiree or fully retired, consider your current and future financial status, debts, obligations and concerns. Ask yourself the following questions, then reach out to an agent to learn more about your life insurance options with Farmers.
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Do your financial concerns have an end date, like saving for college or paying a mortgage?
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Do you want to provide for lifelong financial needs, like retirement?
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Do you want a policy that may build cash value that you can use3, for example, to help supplement your retirement income or help pay for emergency home repairs?
When should I get life insurance?
Many people think about getting life insurance when their life is changing in a big way and they are taking on new financial responsibilities. Common turning points include:
- Change in relationship status
- Change in career or income
- New or expecting parents
- Homeownership
- Retirement
- Business succession planning
How often should I review my life insurance policy?
The same kinds of major life events that prompted you to consider life insurance in the first place — getting married, having a child, buying a house, changing careers, a divorce, graduations — can shift the goals you have for your existing life insurance policy. Each significant change is a good cue for you to review your policy with your agent and make sure your coverage still meets your needs.
How do I prepare for the underwriting process?
Preparing for life insurance underwriting is a crucial step in applying for a policy.
- Be ready to provide some personal information, such as your occupation, lifestyle, habits and family medical history.
- Gather any necessary documentation, including medical history, medication lists and any relevant health records.
- Consider reviewing your financial situation and coverage needs to discuss with an agent.
- Be honest about your health and lifestyle; discrepancies can lead to delays or denial of coverage.
Do I need a medical exam?
When applying for life insurance, many companies require a medical exam to assess your health and to help determine premiums. Typically, traditional underwriting processes involve a thorough evaluation, including a medical history review and physical examination. However, some policies, particularly those with straight-through processing, do not always require a medical exam. These streamlined options are designed for those who want a quicker and more convenient application experience.
Learn From Experience
1 Premiums are subject to change after the initial level premium period.
2 The death benefit is guaranteed according to the terms of the contract and provided that premiums are paid.
3 Cash values may be accessible through policy loans or partial surrenders. Policy loans that are not repaid and partial surrenders will reduce cash surrender value and death benefit. Policy loans are subject to interest charges. If your policy is a modified endowment contract, loans and surrenders may incur taxes and penalties.
FL-26 08-23