MERCER ISLAND, Wash., Sept. 8, 2015 /PRNewswire/ -- In response to consumer demand for more life insurance options that offer lifetime1 coverage with potential cash value growth, Farmers Life® has introduced the Farmers Index Universal Life policy.2 Farmers Index Universal Life combines the protection of permanent life insurance with a flexible premium3 and the opportunity for market-linked, generally income tax-deferred4 growth of the policy's cash value.
Farmers Index Universal Life offers a choice of two indexed accounts, the S&P 500®5 and/or the Russell 2000®6, in addition to two fixed interest accounts. These options let customers take advantage of potential market gains because the policy's cash value can be tied to the performance of an underlying index up to a cap. Customers may allocate the cash value portion of their premium across these accounts based on their individual needs, preferences and risk tolerance.
Unlike a direct investment in the stock market, the Farmers Index Universal Life indexed accounts provide customers with the protection of a guaranteed minimum 0% floor, eliminating the risk of loss of their accumulated cash value because of market declines.
Alternatively, two fixed interest accounts, the Short Term Holding Account and the Long Term Fixed Account, have a guaranteed minimum annual interest rate. The Long Term Fixed Account has a minimum interest rate of 1% while the Short Term Holding Account has a minimum interest rate of 0.1% and allows for the convenient transfer of funds to other accounts.
The policy combines a life-long death benefit with a flexible premium structure and generally income tax-deferred accumulation of cash value within the policy. This cash value can help cover future insurance costs and help the customer maintain life insurance protection as long as needed (up to the attained age of 121). The policy owner can take generally income tax-free distributions7 from the policy at any age for retirement, education, crisis or opportunity.
"We want to make customers smarter about their Life insurance, and that means anticipating the needs of a population that is living longer and working past the traditional age of retirement," said John Henle, Head of Distribution at Farmers Life. "Customers want options to build their cash value in a product that has real growth potential with a minimal risk of loss."
As an added benefit, the policy offers a chronic illness rider in most states. This rider, available to qualified insureds for no additional premium, allows the policy owner a way to access proceeds, at a time when they may need it most, through accelerated payment of a portion of the policy's death benefit when the insured has been diagnosed with a qualifying chronic condition.
"We wanted to give customers another option to help protect their assets, should they have a serious illness, by giving them the flexibility to access a portion of their cash value," said Henle. "This new chronic illness benefit recognizes the concerns of an ever-aging population, providing a way to help them pay for expenses."
About the Indexed Accounts
Policy owners may allocate premiums to one or both of the Indexed Accounts within the policy. Indexed account credits are calculated at the end of each one-year segment for each indexed account. The growth rate is calculated based on the value of the index at the end of the segment compared to the value of the index at the beginning of the segment. The growth rate is then multiplied by a participation rate and capped at the cap rate declared by the company, and cannot be less than the minimum guaranteed rate of 0%. The indexed account choices are:
- S&P 500® is an American stock market index that reflects the market performance of 500 large-cap companies.
- Russell 2000® is the most widely quoted measure of the performance of small-cap stocks traded in the U.S.
About Farmers New World Life Insurance Company
For more than one hundred years, customers have turned to Farmers New World Life Insurance Company to help protect the financial security of their loved ones, the continuity of their businesses, and the stability of their retirement incomes. For generations, in good times and bad, we have kept our promises to our customers and the ones they love.
Farmers Life is associated with Farmers Insurance Group of Companies®, one of the nation's largest insurance groups, providing home, auto, business, and life insurance, annuities, and financial services. For more information about Farmers, ask your Farmers agent or visit our website at www.farmers.com.
About Farmers Insurance
The Farmers Insurance Group of Companies is a leading U.S. insurer group of automobiles, homes and small businesses and also provides a wide range of other insurance and financial services products. Farmers Insurance is proud to serve more than 10 million households with nearly 20 million individual policies across all 50 states through the efforts of over 50,000 exclusive and independent agents and approximately 24,000 employees.
1Lifetime coverage is guaranteed as long as all premiums are paid to keep the policy in force.
2ICC14-FIUL or applicable state variation.
3This policy may lapse if premiums are not paid or if premiums paid are not sufficient to continue coverage.
4For informational purposes only. In general, partial withdrawals from a permanent life insurance policy in excess of the policy's basis are taxable, and limited circumstances exist where death proceeds will be taxable. Neither Farmers New World Life Insurance Company, its employees nor its Agents provide legal or tax advice. Always consult your own attorney, accountant or tax adviser as to the legal, financial or tax consequences and advice on any particular transaction.
5The S&P 500 Index is a product of S&P Dow Jones Indices LLC ("SPDJI"), and has been licensed for use by Farmers New World Life Insurance Company (FNWL). Standard & Poor's®, S&P® and S&P 500® are registered trademarks of Standard & Poor's Financial Services LLC ("S&P"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by FNWL. Farmers Index Universal Life (FIUL) is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P 500 Index.
6Russell Investment Group is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Russell Investment Group.
Farmers Index Universal Life ("IUL") is not promoted, sponsored or endorsed by, nor in any way affiliated with Russell Investments ("Russell"). Russell is not responsible for and has not reviewed the IUL nor any associated literature or publications and Russell makes no representation or warranty, express or implied, as to their accuracy, or completeness, or otherwise.
Russell reserves the right, at any time and without notice, to alter, amend, terminate or in any way change the Russell Indexes. Russell has no obligation to take the needs of any particular fund or its participants or any other product or person into consideration in determining, composing or calculating any of the Russell Indexes.
Russell's publication of the Russell Indexes in no way suggests or implies an opinion by Russell as to the attractiveness or appropriateness of investment in any or all securities upon which the Russell Indexes are based.
Russell makes no representation, warranty or guarantees as to the accuracy, completeness, reliability or otherwise of the Russell indexes. Russell makes no representation, warranty or guarantee regarding the use, or the results of use, of the Russell indexes or any data included therein, or any security (or combination thereof) comprising the Russell indexes. Russell makes no other express or implied warranty, and expressly disclaims any warranty, of any kind, including without limitation, any warranty of merchantability or fitness for a particular purpose with respect to the Russell index(es) or any data or any security (or combination thereof) including therein.
7 Distributions from a life insurance policy in the character of partial surrenders (withdrawals) up to basis or policy loans will generally be income tax free, provided the policy does not violate Modified Endowment Contract (MEC) guidelines and the policy is not terminated during the lifetime of the insured. MEC guidelines are rules in the Internal Revenue Code which specify maximum premiums that can be paid without triggering adverse tax consequences for withdrawals. A policy termination during the life of the insured can cause the owner a single taxable event for any gains in the policy that were borrowed or withdrawn on or before the termination date.
8Policy loans and withdrawals 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 withdrawals may be subject to taxes and penalties.
9Policy Form ICC15-CRN. Not available in California.
A Farmers agent may only sell policies in states in which he or she is licensed.
Farmers New World Life Insurance Company is not licensed to sell life insurance, accident and health insurance, or annuities in the state of New York.
Life insurance issued by Farmers New World Life Insurance Company, 3003 77th Ave. SE, Mercer Island, WA 98040. Products and features may not be available in all states and may vary by state.
SOURCE Farmers Insurance