Common Questions about Life insurance

How much life insurance should I purchase?

If you have a family, many experts suggest that you need an amount equal to 5 to 10 times your annual salary. However, many people own higher coverage's to provide more income for their family.

How can life insurance funds be used?
You can use your life insurance funds for a number of needs, including:

• Any immediate needs at the time of death, such as final illness expenses, burial costs and estate taxes
• Funds for a readjustment period, to finance a move, or to provide time for family members to find a job
• Ongoing financial needs, such as monthly bills and expenses, day-care costs, college tuition or retirement.

What is the difference between term and permanent life insurance?
Term insurance provides you with coverage for a specific period of time. It pays a benefit only if you die during that term. Some term insurance policies can be renewed at the end of the period. Others give you the ability to reenter. Premium rates will increase at each renewal date or each reentry. Many policies require you to provide evidence of insurability at reentry in order to qualify for the lowest available rates. Because term insurance premiums are generally lower than permanent insurance premiums, you can usually afford a higher level of coverage. Term insurance is good for covering responsibilities that will diminish or end over time, for instance, mortgages or car loans.

Permanent insurance is designed to be a lifelong policy and is known by a variety of names. As long as you pay the necessary premiums, the death benefit will always be there. These policies are designed and priced for you to keep over a long period of time.

In addition, permanent life insurance policies can build cash value over time. This is money that can be borrowed against and, in some cases, withdrawn to help meet future goals. Please note that assessing your cash value may reduce the death benefit and increase the risk of lapse.

What's the difference between standard and preferred rates, and how do I qualify for preferred rates?
Most often preferred rates require you to be in excellent overall health. Specifically, that means you must:

• Be within strict limits on height, weight, cholesterol, and blood pressure
• Have no family history of any significant health impairments
• Not use tobacco in any form.
• Have no history of drug or alcohol abuse
• Not be engaged in any hazardous activities

Do I have to take a medical exam to qualify for life insurance?
In most cases, an exam is required. If so, we will pay the costs and have it done at a time and place convenient for you – often right in your home.

Will my policy ever be canceled for health reasons?
As long as you keep your premiums current, your policy will never be canceled because of a change in your health, and you will not be asked to provide evidence of good health in order to renew your policy each year. However, you have the right to cancel your policy at any time.

What happens if I become disabled?
Many policies include a rider that provides a "waiver of premium" for total disability. In the event you become totally disabled for a certain period (typically six months or longer), then Farmers will pay your premium for you until you are no longer disabled.

Should I get coverage for my spouse and/or children?
Coverage for both spouse and children can be a very good idea. The financial strain on a family after the loss of a spouse can be significant, even if the deceased wasn't earning an income. Often the surviving spouse will want to take time off work or change jobs in order to spend more time with the children. Coverage for children is also available to cover final expenses. It can also guarantee insurability for the child's future.

When I send in my application, should I include a check?
Although most people submit a check with their application, there is no requirement to do so. The premium can be paid once the policy has been approved.

Types of Policies

Farmers Term Life Insurance Policies
Farmers Term Life Insurance is the right choice when you're looking for temporary coverage to fit your current family or business needs. These plans generally provide the most coverage for your insurance dollar. What's more, several of the plans are renewable or even convertible to permanent forms of coverage that lock in your premium cost over the life of the policy

Farmers Level Term 2000 Plans*
There may be times when you need temporary additional life insurance protection for as little as five years or as long as 30 years. Farmers Level Term 2000 plans provide affordable life insurance coverage that is guaranteed to remain level as long as you need the coverage. Whether for family or business needs, Farmers Level Term 2000 Life Insurance may be the right product for your needs.

Farmers Level Term 2000 Life Insurance coverage can help safeguard your family's financial security by paying for a mortgage balance, child's college education, family income, personal debts or final expenses. Farmers Level Term 2000 coverage can also be used to meet a variety of business life insurance needs, such as key person coverage, security for a business loan, funding for a buy/sell agreement or low-cost optional employment benefit.

Riders and Benefits
An Accelerated Death Benefit Rider is included with your policy at no extra charge. If you are diagnosed with a terminal illness while your policy is in force, this rider allows you to request payment of a portion of the policy's death benefit. For an additional cost, other riders and benefits may be added to tailor your Farmers Level Term 2000 policy to your special circumstances. The amount available will be calculated by Farmers New World Life Insurance Company at the time of the request.

Deposit Fund**
This optional side fund may be used to build cash reserves for the future. The minimum payment is $25. Interest is compounded annually, and the fund earns a competitive current interest rate. Withdrawals from the fund do not affect the policy's death benefit.

Farmers® universal Life insurance policies*
Sometimes basic Life insurance isn't the right choice. Farmers universal Life policies are designed to provide protection that fits your changing financial situation with:

• Flexible coverage
• Options for timing and method of premium payment
• A long list of features and options

Farmers universal Life policies offer preparation for retirement, estate conservation and income tax benefits you should know about. Your Farmers agent can explain them.

Farmers Flexible Universal Life* (policy form 2003-048)
Farmers Flexible Universal Life policy works hard to keep up with your current and future needs. It allows you to change the type of coverage and the death benefit while offering an outstanding cash accumulation program. Farmers Flexible Universal Life can adjust to provide

• Optimum insurance protection
• Estate conservation
• Maximized income
• Income Tax-favored status for faster growth
• Additional source of retirement savings

Farmers Flexible Universal Life Benefits

• Coverage - We offer a low minimum coverage to help you get started. Permanent coverage is available in amounts as low as $75,000 ($50,000 for juveniles).
• Premium - A minimum premium is required the first year, with the option of changing the timing or amount of payment afterwards
• Cash value - Every month cash value is credited to the policy to give you full benefits from the time you pay your premium. You also get competitive, interest rates.

Special Riders and Benefits
Farmers Flexible Universal Life offers a number of special riders and benefits that allow you to custom tailor your particular policy

• Waiver of Deductions
• Monthly Disability Benefit
• Accidental Death Benefit
• Additional Insured Rider
• Increase Benefit
• Payer Waiver of Deduction
• Children's Rider
• Juvenile Guaranteed Insurability Benefit