What is Life Insurance?
Life insurance is basically a form of insurance where an insurance company pays monetary proceeds upon the death of the individual insured in the policy.  The money is paid to a beneficiary that is designated in the policy.  People take out life insurance for several reasons, but mostly  to provide financial security to family and loved ones upon death. Life insurance can also help meet financial obligations of business owners who may leave obligations in the event of their death.

Protecting Your Family
By preparing in advance, you'll have the peace of mind that comes from knowing you're protecting your family's financial future. And since Life insurance benefits are generally not taxable at the federal level**, your loved ones can use the benefits to help take care of their living expenses in a variety of ways.

* Any needs after the time of death, such as final illness expenses, burial costs and estate taxes.

* Funds for a readjustment period, to finance a move, or to provide time for family members to find a job.

* Ongoing financial needs, such as monthly bills and expenses, daycare costs, college tuition or retirement.

Safeguarding Your Business
If you're a business owner or have business partners, it's important to prepare for the unexpected. Farmers offers several Life insurance products that are designed to help you, as a business owner, to make it possible for your heirs to help pay estate taxes and help sustain the business during a change in management, or to help provide funds in order to execute a buy-sell agreement between partners or stockholders.**

Types of Life Insurance Products

Term Life Insurance
This is the simplest form of Life coverage, term insurance is no more than a matter of premiums and a death benefit. The name fits since term insurance's span of coverage lasts only a specified period of time; if the insured dies while the policy is in force, the death benefit will be paid to the designated beneficiary.

Whole Life Insurance
Permanent form of Life coverage that is provided for the insured's lifetime. Whole Life policies build cash value that the policy owner may borrow during the insured's lifetime, at a reasonable rate of interest. If there is an outstanding loan at the time of the insured's death, the death benefit is reduced by the loan amount.

Universal Life Insurance
Permanent form of Life coverage that offers a great deal of flexibility to the policy owner. Premium payments may be varied, death benefits may be changed, partial surrenders are allowed, and cash value may be accessed either through loans or direct withdrawals.

**This document is for informational purposes only. You should consult your attorney, accountant, or tax advisor for legal or tax advice.