Term life insurance for farmers
Helping build peace of mind and a solid foundation
In a busy, always-changing world, it’s important to know there are some things you don’t have to worry about. Life insurance can help provide financial security for your family and create a foundation on which to build other insurance and investment decisions.
Protections and guarantees are subject to the claims-paying ability of the issuing life insurance company. Be sure to choose a product that meets long-term life insurance needs, especially if personal situations change — for example, marriage, birth of a child or job promotion. Weigh the costs of the policy, and understand that life insurance has fees and charges that vary with sex, health, age and tobacco use. Riders that customize a policy to fit individual needs usually carry an additional charge.
The importance of life insurance
Determining your life insurance needs
There are many common methods for deciding your personal insurance needs:
Rule of thumb
The amount you’ll need is 5 to 7 times your annual gross income.
Expense calculation
Determine expenses for burial, an emergency fund, personal debts, a mortgage, a college education and income replacement. Add these together to determine your insurance need.
Income replacement
Determine how much of your annual income your family members would require to maintain their current standard of living (the average is 70%). Purchase enough insurance so the proceeds, if invested at an after-tax rate of 6%, would generate this income.
Term life insurance
Term life insurance provides protection over a specific period of time. It pays a benefit only if the insured dies during this specific period or “term.” Terms vary from policy to policy but can range from 1 year to 30 years. At the end of each term, the insurer may require you to provide evidence of good health to purchase continued protection. Annual renewable term policies may continue without further qualification, but premiums may increase each year.
Term vs. permanent life or cash-value life insurance
Permanent life insurance provides lifelong protection. As long as you pay the premiums, the death benefit remains in effect. And most permanent life insurance builds a cash value; term policies don’t.
Conversion privileges
This means you may convert or exchange your term policy for a permanent, cash-value policy equal to the current death benefit amount of the term coverage. Usually, there are no further medical questions. Keep in mind that the longer you wait to convert, the higher the premiums will be on your new permanent policy. Some restrictions might apply.
The advantages of term life insurance
- Flexibility to choose from many different coverage periods
- Low initial cost compared with permanent insurance
- Large amounts of coverage can be purchased relatively inexpensively
- Many term policies offer a term-to-permanent insurance privilege
- Could be appropriate for temporary needs such as a mortgage or car loan
Disadvantages
- Premiums can increase at renewal as you grow older
- Coverage may terminate at the end of the term and might become too expensive to keep at renewal
- Term policies do not build cash value
Why Nationwide®?
Nationwide has a special, long-term relationship with agriculture.
Nationwide® began in 1926 as the Farm Bureau Mutual Insurance Company; Ohio Farm Bureau leaders created it to provide automobile insurance at lower rates for Ohio farmers, who drove less and had fewer accidents than city residents. Farming is in our roots.
farm insurer1 in the nation.
Many Nationwide board members are active farmers.2