Farmers Life Insurance Company Review
Officially known as Farmers New World Life Insurance Company and part of the international Zurich Financial Services conglomerate, Farmers Life Insurance is the life insurance arm of the multi-line insurer Farmers Insurance Group. Fully integrated with Farmers’ property and casualty insurance interests, Farmers Life Insurance is often marketed as part of a comprehensive insurance solution rather than on its own. Farmers Life Insurance currently maintains an A rating (excellent) from A. M. Best for financial strength.
History and Structure
Founded in 1910 in Spokane, Washington, as the New Roman Catholic Life Insurance Company, Farmers Life Insurance actually predates the founding of its parent company, Farmers Insurance Group, by nearly 20 years. The company changed its name to New World Life Insurance Company soon after raising its first $1 million in operating capital. New World Life moved to Seattle in 1930 and 12 years later purchased the city’s first skyscraper, the Alaska Building. Today the company is based in the Seattle suburb of Mercer Island, Washington.
New World Life became Farmers New World Life Insurance Company in 1953 after the Los Angeles-based property and casualty insurer Farmers Insurance Group purchased a majority interest in the company. Farmers New World Life became a fully-owned subsidiary of Farmers in 1977.
Farmers and Farmers Life Insurance were bought out by the American subsidiary of British American Tobacco (BAT) in 1988, creating an ironic situation in which life insurance products were sold by the same conglomeration that produced Lucky Strike cigarettes, among others. Ten years later the Farmers companies came under the control of Zurich as part of an $18.6 billion deal in which BAT sold all of its financial services interests worldwide to the Swiss insurer. Today Farmers Life Insurance is Zurich’s primary life insurance underwriter in the United States.
Farmers Insurance Group operates a primarily captive agency force, especially in its base in the Western and Midwestern states. It appoints independent agents in states where it does not have a strong presence, mainly in the Northeast. Farmers Financial Solutions, LLC acts as the distributor of the company’s variable life and annuity products.
The following product discussions are intended to be a generic representation of the policies Farmers 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 Farmers Life Insurance agent for the most up-to-date information.
As Farmers is a multi-line insurance company which emphasizes “cross-selling” among its agency force, it offers discounts on most of its life insurance products for individuals who also hold one or more Farmers property and casualty products such as auto or homeowners insurance. Consult with a Farmers agent for more information.
Farmers Life Insurance 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.
Farmers Life Insurance 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.
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, Farmers Life Insurance 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 Life Insurance. 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.
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