Zurich Life Insurance Company Review

As one of the largest European-based insurance companies, Zurich life insurance is a major player in the United States insurance market, although most people know the company by a different name. In the United States, the Swiss insurer is primarily not known by the same name as where the company was founded, but as Farmers, a multi-line insurance company with major life, home and auto insurance portfolios. As Farmers, Zurich holds an A an A rating (excellent) from A. M. Best for financial strength.

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History and Structure

Zurich Financial Services was founded in Zurich, Switzerland, in 1872 as part of the Schweiz Marine Insurance Company. It was originally known simply as the “Versicherung Verein,” which roughly translates as “Insurance Club.” Over the years Zurich grew into one of the largest insurance companies in Europe. In 1912 Zurich became the first foreign insurer to enter the United States market.

Although at one time Zurich sold life insurance in the United States under its own name, it sold that portion of its business to JPMorgan Chase Company. Today Zurich sells only specialty commercial insurance in the United States under its own name.

In 1998 Zurich acquired the financial services businesses owned by British American Tobacco, which included the Los Angeles-based Farmers Insurance Group and Farmers New World Life Insurance Company of Mercer Island, Washington. Zurich has since organized the Farmers companies as its main presence in the United States. Indeed it is through Farmers New World Life that Zurich sells the vast majority of its life insurance in the United States.

Term Life

The following product discussions are intended to be a generic representation of the policies Zurich Life Insurance offers. Not all products may be available in every state as described. In addition policy features and underwriting requirements may change without notice. Consult with a Zurich Life Insurance agent for the most up-to-date information.

Through Farmers, Zurich offers several different types of term life insurance. The Farmers Level Term 2000 is available for adults in terms of 10, 20 and 30 year terms with available critical illness and terminal illness accelerated death benefit riders. Other available riders include waiver of premium, accidental death benefit, children’s term insurance and a deposit fund rider. Limited conversion options to permanent life insurance are available as well.

The Farmers Simple Term Life Insurance plan is a no-physical term life insurance product which is available to smokers and non-smokers alike in face values between $75,000 and $150,000. As with the Level Term 2000, plans are available for adults in 10, 20 and 30 year terms, however the 20- and 30-year terms are only available to ages 60 and 45 respectively. The only available riders are terminal illness accelerated death benefit, waiver of premium and accidental death benefit.

Farmers Decreasing Term Life Insurance is a distinctive product in which the premiums remain level but the face value decreases on a monthly basis. This product is often marketed as a means to cover a mortgage payoff in the event of the insured’s death. It is also available in a two-party survivorship option.

Whole Life

As the American representative of Zurich life insurance, Farmers New World Life offers two whole life insurance products. The Farmers Fixed Premium Whole Life is a policy designed to pay for final expenses, with maximum face value of $25,000 between ages 21 and 65 and $15,000 between ages 66 and 80. These policies are underwritten but promise a quick issuance. If the insured lives to age 100, the policy matures and the insured receives the face value as an endowment. This is a practice that used to be a staple of whole life policies industry-wide but is quite uncommon today.

The Farmers Premier Whole Life product is the company’s flagship whole life policy. Available up to age 80 in nicotine and non-nicotine classes, this policy is available with face values as little as $10,000 for customers up to age 50, or up to $250,000 or even higher if desired. Available riders include a one-year term and single premium paid-up riders at issue, waiver of premium, children’s term, terminal illness accelerated death benefit and payor death and disability riders. A deposit fund rider is also available in most states.

Universal Life

The Farmers EssentialLife is the company’s fixed universal life insurance product. Available in both traditional level or increasing death benefit options, this policy offers flexible premiums after a minimum required premium during the first policy year. Available riders include the terminal illness accelerated death benefit, owner waiver of deduction, automatic increase benefit, monthly disability benefit, additional insured, accidental death and children’s term insurance riders.

Through Farmers Financial Solutions, Zurich and Farmers New World Life also offers a variable life insurance (VUL) product. This policy operates in a similar manner to the Farmers EssentialLife, but has its cash value mechanism based on separate accounts similar to mutual funds. As such the rate of return on the VUL can exceed that of the Farmers EssentialLife, but because it is susceptible to market conditions it can lose money as well.

Annuities and Other Products

Annuities are available as both qualified and non-qualified plans from Farmers New World Life. Fixed annuities are sold directly by Farmers New World Life, while variable annuities are available from Farmers Financial Solutions. Variable annuities are funded by separate accounts managed by third-party asset management companies. Full details can be obtained by requesting a prospectus from a Farmers insurance agent who is licensed and appointed as a registered representative through Farmers Financial Services.

Farmers Financial Services also markets mutual funds through its network of agents. Although these are not insurance products, Farmers registered representatives as a part of their licensing hold the FINRA Series 6 and/or Series 63 licenses, which allow them to sell mutual funds as well.

The Kemper Investors Life Insurance Company is a Zurich affiliate that sells variable annuities independent of the Farmers companies. This company is also not to be confused with Kemper Independence Insurance Company, which operates as a subsidiary of the Chicago-based Unitrin, Inc. These variable annuities include the Scudder Destinations product, which features separate accounts administered by Alger American, Invesco, Credit Suisse, Dreyfus and other third party asset management companies.

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