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 a conservative type of life insurance because it provides a guaranteed level premium, death benefit2 and cash value accumulation. Farmers® Whole Life policy3 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 free.4
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 value5.
If you cancel, you
get back the
available cash value.
Through a policy loan, you
can borrow against the policy’s
cash value.5
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.
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 cash value may be accessed during the life of the policy.
- Cannot be converted into another type of life insurance policy.
- Farmers offers four premium durations: 10-year, 20-year, age of 65, or age 100.
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.
What are some differences between whole life and index 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 index universal life insurance policies differ in key ways.
Whole life
insurance
- Permanent — provides lifetime coverage as long as required premiums are paid.
- Premiums are guaranteed level for the life of the policy.
- Death benefit is guaranteed2 for the life of your policy and generally income tax free. You choose a coverage amount when you buy a policy.
- Cash value builds at a guaranteed rate with each month’s premium. Can be used during your lifetime. If you outlive your policy, you receive the cash value, minus any outstanding loans.
- Farmers offers four premium durations: 10-year, 20-year, age of 65, or age 100.
Index universal
life insurance
- Permanent — provides lifetime coverage as long as the policy remains adequately funded.
- Premiums are generally flexible. You can often adjust the amount and timing within policy limits.
- Death benefit is flexible but can be guaranteed depending on the policy design and funding and is generally income tax free.
- Cash value accumulation is fostered by the ability to choose between two indexed accounts and a long-term fixed interest account. Policyholders can strategically manage their allocations to help meet their diverse financial needs. Each account comes with a guaranteed minimum rate of return, cash value that grows over time, and a floor that the account value does not decrease.
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 and have the potential for excess credits. At the company’s discretion, your policy may be eligible to receive additional credits each year. You can elect to use these credits to help grow cash value, add coverage or reduce premiums. 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 whole life coverage is available with different premium durations. Simply put, the premium duration means the length of time you are required to pay premium.
- Lifetime premiums: You pay premiums for your entire life.
- Limited pay premiums: You pay premiums for a specified number of years or until a certain age. After this period, no further premiums are due, but the coverage remains in force.
- Farmers offers four premium durations: 10-year, 20-year, age of 65, or age 100.
Contact a Farmers agent to learn more about your options.
What can you expect when applying for Life insurance with Farmers?
- Apply securely online in the privacy of your own home or with the assistance of a Farmers® agent.
- Most applicants qualify for automatic underwriting (no medical exams) resulting in same-day policy decision on the application.
- For some applicants, a medical exam is necessary. Coverage may still be obtained within a few weeks depending on the outcome of underwriting.
- Self-service customer portal for viewing and managing your policy 24/7.
- A simpler claims experience with convenient self-service options.
- Bundle your insurance coverage under one brand you know.
- Multiple policy pricing available for current Farmers customers.6
For generations, customers have turned to Farmers Life as they help protect the financial future of their loved ones. From term to permanent life insurance options, customers use our products to help them plan for the future of their loved ones, businesses, or both.
Learn From Experience
Expand your knowledge base with articles relevant to you.
When you select a beneficiary for your policy, it becomes part of a binding contract between you and the insurance company, not part of your will and not a decision left up to probate courts or your next of kin.
Both term and permanent life insurance offer “riders” that could potentially provide payments while you’re alive.
Riders allow you to customize your policy so that it works the way you want. It’s important to be aware of these options when deciding on coverage.
Whether term or whole life is better depends on your specific financial goals, personal needs and the stage of life you’re in. So the real question isn’t “Which policy is better?” but “Which policy fits your situation better?”
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 ICC25-FWL or applicable state variation.
4 Farmers® entities, 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.
5 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.
6Multiple policy pricing available on selected life insurance products and may not be available in all states. Contact us to see if you qualify for the multiple policy pricing.
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