Whole Life Insurance
Build a financial foundation to help you support the people who depend on you.
What is whole life insurance?
Whole life insurance is a type of permanent life insurance designed to last your lifetime1 and your beneficiaries receive a payment based on your coverage, as long as premiums are paid on time. It is considered the most conservative type of life insurance because it provides a guaranteed level premium, death benefit2 and cash value accumulation. Farmers® whole life insurance could be a reliable source of financial support for you and your loved ones for future expenses, from college tuition to retirement income.
Key features of a whole life insurance policy
Your premium
never goes up.
Your death benefit goes to the
person or people you name
as beneficiaries. It’s
generally income-tax free3.
Your policy builds a cash value that grows at a guaranteed rate as long as premiums are paid on time.
If you need money during your
lifetime, you can use the available
cash value4.
If you cancel, you
get back the
available cash value.
Through a policy loan, you
can borrow against the policy’s
cash value.4
Customize your coverage today
What are some of the differences between term and whole life insurance?
Term life insurance provides coverage for a specific amount of time and does not accumulate cash value, unlike whole life insurance, which provides lifetime coverage and can accumulate cash value.
Term life insurance
- Provides coverage at a fixed cost for a specific time frame (the level premium period) — generally 10, 15, 20 or 30 years. The cost increases with age.
- Premiums remain fixed for the initial level premium period. The shorter the level period, the less expensive coverage can be. Premiums increase after the level premium period.
- Provides a death benefit but does not accumulate cash value.
- Can often be converted into a permanent policy.
Whole life insurance
- Provides lifetime coverage as long as required premiums are paid.
- Guarantees level premiums for the life of the policy.
- Accumulates cash value over time as long as premiums are paid, and assets can be used during your lifetime.
- Cannot be converted into another type of life insurance policy.
What are some differences between whole life and
universal life insurance?
Both are permanent life insurance, meaning they are designed to last your whole lifetime, as long as premiums are paid. But whole life and universal life insurance policies differ in key ways.
Whole life insurance
-
Permanent — provides lifetime coverage.
-
Premiums are guaranteed level and won’t increase for the life of the policy.
-
Death benefit is guaranteed for the life of your policy. You choose a coverage amount when you buy a policy. You can surrender part of the policy if you no longer need all of it, as long as the remaining policy meets minimum requirements.
-
Cash value builds at a guaranteed rate with each month’s premium. Can be used during your lifetime. If you outlive your policy at age 121, you receive the cash value, minus any outstanding loans.
Universal life insurance
-
Permanent — provides lifetime coverage.
-
Premiums are flexible5. You can choose each month to pay the minimum or pay more. Payment above the cost of insurance builds as cash value.
-
Death benefit is flexible. You can increase it, with underwriting approval, or reduce it, within policy limits. You can also choose whether the death benefit is a fixed amount or increases by the amount of your cash value.
-
Cash value builds with payments above the cost of insurance and earns interest. Can be used to cover increasing cost of insurance with age. Can be used during your lifetime. You can choose whether the death benefit paid to your loved ones is level or includes the cash value.
Frequently asked questions
How does whole life insurance work?
A whole life insurance policy has a set premium that’s guaranteed never to increase, based on the amount of coverage you want as well as factors like your age, health and risk factors like smoking. Whole life policies can accumulate cash value, too. When you die, your beneficiaries receive a payment (called a death benefit) in the amount of coverage you choose minus the policy’s loan balance (if any). Get more answers to your questions about life insurance.
How much whole life insurance do I need?
To make a rough calculation of how much coverage you might need, consider the answers to a few questions about your dependents’ financial future.
- Do they rely on your income? For how many years will that be true?
- Does anyone depend on you for long-term care? How many years will they need it?
- Do you have kids heading off to college? What would that cost?
- Do you have a mortgage or other substantial debt that needs paying off?
Because whole life insurance costs more than term insurance, you might consider buying a term life policy for short-term needs and a whole life policy for long-term needs.
How much does whole life insurance cost?
The cost of a whole life insurance policy will depend on factors that include:
- The amount you want your beneficiaries to receive
- Your age when you apply
- Your health
- Whether you smoke or have other risk factors
What types of whole life insurance does Farmers® offer?
Farmers offers coverage on several types of whole life policies, each with unique features, including:
- Traditional whole life insurance: You pay a fixed premium every month, and your coverage lasts your entire life. It also builds guaranteed cash value over time, which you can borrow against or withdraw.
- Limited pay whole life insurance: You pay premiums for a short period, like 10 or 20 years, but still have coverage for your whole life. After the payment period ends, you don’t have to pay any more premiums.
Contact a Farmers agent to learn more about your options.
Learn From Experience
Expand your knowledge base with articles relevant to you.
Life insurance can be a tricky topic. It’s designed to provide financial support for those who depend on you, but permanent life insurance can also be used to access money for big purchases during your lifetime through policy loans.
Policy types are different because they’re designed to do different things. So the real question isn’t which one is a better tool, but which tool fits your situation better.
Both term and permanent life insurance offer “riders” that could potentially provide payments while you’re alive.
Permanent life insurance — a category that includes whole life and universal life — typically has two key features: a death benefit and a cash value that builds within the policy.
Why Farmers Life®
For generations, customers have turned to Farmers Life to help them protect the financial future of their loved ones, businesses, or both.
- Apply securely online, or with the assistance of a Farmers agent
- Same-day underwriting decisions, with no medical exams6
- Express claims service
- Bundle your insurance coverage under one brand you know
- Discounts available for current Farmers customers7
1 Lifetime coverage (or life of the policy) is guaranteed provided premiums are paid per the terms of the contract.
2 The death benefit is guaranteed according to the terms of the contract and provided that premiums are paid.
3 Farmers® companies, employees, agents, and representatives do not provide legal or tax advice. In general, partial or full surrenders from a permanent life insurance policy in excess of the policy’s basis are taxable. Limited circumstances exist where death proceeds will be taxable. This material has been prepared for general informational purposes only, and is not intended to provide and should not be relied on for tax, legal or financial advice. Because each individual’s situation is different, specific advice should be tailored to your particular circumstances; you should always consult your own tax, legal and other advisors before engaging in any transaction. This material reflects our general understanding of current law as of the date hereof, but tax laws and IRS administrative positions may change. This material is not intended to and cannot be used to avoid any Internal Revenue Service penalties. We specifically disclaim any liability resulting from the use or application of information contained in this publication. Farmers New World Life Insurance Company is not affiliated with or endorsed by any government agency.
4 Cash values may be accessible through policy loans. 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.
5The cost to keep your policy in force will increase over time. This policy may lapse if you do not pay enough premiums to continue coverage.
6 Issuance of a policy may depend on answers to questions set forth in the application.
7 Discounts available on selected life insurance products and may not be available in all states. Contact your agent to see if you qualify for the discount.
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