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Life Events

Life Insurance for Family Members with Special Needs

Love and obligations that last a lifetime

Parents with a special needs child understand the extraordinary responsibilities that come with finding the right schools, doctors, caretakers and other professional service providers that will help give their child the best possible chance for living a long and happy life. However, this also means their child may outlive them, and that’s a scenario most parents of special needs kids don’t like to think about. Who will take care of my child when I’m gone? Who will pay for my child’s living expenses?

Covering the costs associated with the care of a special needs individual adds up quickly and only increases over the long term. An adaptive wheelchair can top $10,0001, while a hospital stay can easily set you back $30,000 in three days.2 In fact, the cumulative cost to care for an individual with autism can reach $2.4 million over the entire course of his or her life, according to a study published in the Journal of the American Medical Association.3

Planning for the future can be overwhelming as a family tries to balance current needs and financial constraints with concern for the future care of their child.

Fortunately, there are options to help parents meet the long-term financial commitment necessary to provide care for their special needs child.

Where to find help

Because of the ongoing financial responsibilities associated with caring for an individual with special needs, the federal government may provide monetary assistance to help cover some of the expenses that come with maintaining the quality of life for disabled individuals, such as purchasing a specially equipped van, home health care, travel options or other developmental aid. However, in order to qualify for this crucial government assistance, dependents with special needs must fall under certain income and asset thresholds.4

A special needs trust may be an effective way for parents to capitalize on government assistance while providing long-term security and the vital resources necessary for their child’s well-being.

Special needs trusts

A properly drafted special needs trust can protect the beneficiary’s eligibility for government benefits, while at the same time providing access to the assets held in the trust for his or her benefit. Even though access to assets within the trust is restricted, the trust can still pay, at the trustee’s discretion, for important expenses such as transportation, home health care, education, rehabilitation, computer equipment, and medical and dental care that are not covered by private policies, Medicare or Medicaid.

  • Third-party settled trust
    This is the most often used trust for parents of children with special needs because it can provide for the child throughout his or her lifetime. By using this type of trust, the special needs person can still qualify for government assistance, which goes a long way toward ensuring long-term quality of life.
  • Self-settled trust
    This kind of trust is established when a special needs individual funds his or her trust with their own money and names themselves as the beneficiary. When this money is used in conjunction with government assistance, any funds in the trust that are still available after the person passes away must go toward repaying the government.

During the process of creating a special needs trust, a trustee other than the beneficiary will be named. The trustee is responsible for distributing money to the disabled individual. To continue to qualify for government assistance, a third party must act as the trustee to oversee distributions from the trust. This makes the funds available for the special needs individual throughout their lifetime.

Since the needs of the disabled beneficiary can vary over time, it’s important to evaluate the trust regularly to ensure it continues to provide adequate financial support.

Life insurance

Many families with special needs children request that the trust purchase life insurance on the life of one or both parents. This strategy allows parents or caregivers to budget an amount today to provide a leveraged death benefit that will help fund the trust to care for the child after the parents are gone, and may ease their concerns for their child’s long-term financial needs.

Sources:

1 Pricelist: Medicaleshop.com, accessed 01/04/16.

2 Department of Health and Human Services, The Value of Health Insurance, CMS Product No. 11631, Revised June 2015.

3 Costs of Autism Spectrum Disorders in the United Kingdom and the United States, JAMA Pediatrics, August 2014.
4 Social Security Supplemental Security Income (SSI) SSA Publication No. 05-11000 August 2012.

Your 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.

Farmers New World Life Insurance Company, 3003 77th Ave. SE, Mercer Island, WA 98040.

IC -0116-A 01/16

Estate and Legacy Planning

We all leave a legacy when we die, no matter the amount of our assets. Estate planning — taking a systematic approach to preparing for the distribution of assets after a person’s life ends — is an important part of financial planning. It can be easy to delay estate planning, since it requires facing up to the inevitability of death. This delay may be very costly if it leads to incomplete plans, however. When considering how your estate will be distributed, a well-organized financial plan can make a big difference in how your assets are allocated to your loved ones.

Estate planning basics

In order to maximize the value of your estate, you need to analyze how each asset will pass to your beneficiaries. It’s important for you to plan. You’ll want to be thoroughly informed on what actions you can take or situations you can plan for now to make sure you maximize the amounts your beneficiaries will receive.

What is a trust?

A trust is a legal entity that owns and manages property for the benefit of another, a contract you establish with someone who will own and manage certain assets for you and the good of the beneficiaries you choose. The person creating the trust, called the grantor, establishes the trust by transferring assets to the trust and nominating a person, the trustee, to manage.

The trustee agrees to manage the trust according to the rules the grantor sets out in the document when the trust is created. The trust document also defines the beneficiaries of the trust — the individuals or organizations to whom the trust will provide benefits.

In order for assets to be managed by a trust, they must be titled in the name of the trust, rather than in the name of the grantor. This can involve establishing separate bank accounts, re-titling real property, or re-registering securities*. This is an important step in protecting the assets.

Why create a trust?

A trust allows its grantor to set up separate legal management of the assets in the trust. This can have many benefits in estate planning, including helping to:

  • Avoid probate
  • Remove assets from the taxable estate2
  • Protect assets from creditors and liability
  • Provide ongoing support to beneficiaries
  • Promote personal values or create a charitable legacy

Legacy planning and charitable giving

Do you want to leave something to those who have helped you along the way? Legacy planning — a more comprehensive form of estate planning — can help distribute your assets to the people and organizations you choose, and can perpetuate generational wealth.

An important part of legacy planning involves permanent life insurance1. Permanent Life insurance can help in two ways: It may build cash value you can use3 generally income-tax free4 for a family’s loss of income, mortgage costs or educational needs, or it can be used to provide a financial legacy for beneficiaries. Life insurance can also help cover probate and estate tax costs, leaving your property or business intact.

No matter your income level, you can use life insurance to meet both personal and charitable objectives. Legacy planning offers numerous techniques that make significant charitable contributions possible even for families of modest means, while preserving income or assets for you and your family.

There are a variety of ways to set up a charitable gift using life insurance:

Donate an existing policy — Consider donating a policy you no longer need. You continue paying the premiums with the amount equal to each premium payment being a gift to the charity or the charity may make premium payments in expectation of the eventual death benefit. The charity becomes both owner and beneficiary of your policy.

Purchase a new policy — You may purchase a permanent life insurance policy and donate it to a charity. The charity may use the policy’s cash value while you’re alive and receive the policy’s death benefit when you die.

Leave a bequest at death — If your estate is the beneficiary of your policy, your will can direct use of some or all of the proceeds of your life insurance to make a gift to charity, free of any federal estate tax. This will be true whether you or the charity owns the policy.

Note that you can also designate your favorite organizations as beneficiaries on an existing policy.

What will you leave behind?

You’ve worked hard, and now you are focused on leaving the most you can to the people you care about. Whether you want to leave money for a grandchild to put toward a college education or give a gift to a charity, you want to do the most you can with the money you plan to pass along.

Contact your local Farmers agent today to help build a customized package that includes life, business and personal coverage that can help meet your unique needs.

2This material is for general informational purposes only and is not legal or tax advice. 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. The material may not reflect your particular circumstances. Neither Farmers Insurance nor any of its agents, employees, or registered representatives is authorized to provide tax or legal advice. Please consult your tax or legal advisors for advice specific to your situation. Carefully read the contract prior to purchasing any life insurance or annuities. This material presents our general understanding of current law, as tax laws and IRS administrative positions may change. This material is not intended to, and cannot be used to avoid any Internal Revenue Service penalties.

3Policy 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.

4 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.

Your 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.

1215-A 12/15

Stock-Market Indexes and Smart Life Insurance Strategies

Stock market indexes are a crucial part of the global monetary system, but do you know what they are or how they can affect your financial portfolio – or your life insurance?

At its most simple, a stock market is made up of investors who buy and sell stock in thousands of publicly traded companies. A company’s stock price goes up or down depending on how much investors are willing to pay for one piece of stock, called a share. Investors take gains or losses on their money depending on how well the stock performs each day.

Company stock is traded – bought and sold – on exchanges. There are hundreds of exchanges around the globe that range in size from The New York Stock Exchange, the world’s largest exchange trading more than 1800 companies’ stock each business day, to the fledgling exchanges that trade just one or two stocks in places like Cambodia, Cameroon and Laos.

Understanding Indexes

An index acts like a barometer of a certain subset of the stock market, making it easier to see how one set of stocks performs relative to another. Indexes don’t focus on any one company’s stock, which can fluctuate because of a company’s individual business circumstances (like a fire at a plant or changes in executive leadership) that may have little to do with the economic forces affecting a market sector. Instead, indexes represent a pool of stocks that generally includes companies having similar characteristics such as size, or the industry that the companies do business in – like oil and gas, automotive, or textiles and apparel – to name a few.

Two well-known stock indexes are the S&P 500®3, which follows the performance of 500 large-cap American companies, and the Russell 2000®4 Index, which follows 2,000 small-cap American companies.

While you can’t invest directly in an index, various index-linked products are available. These are popular because risk is spread across all of the companies represented by the index and gains or losses reflect the combined movement of the index’s underlying stocks. This diversified approach can reduce risks over the long run.

Stock-Market Indexes and Life Insurance

One example of an indexed insurance product is indexed universal life insurance, a long-term financial tool that combines an end-of-life benefit with the potential for cash value growth linked to a stock market index.

With an indexed universal life policy, you may allocate your premium into accounts whose returns are linked to the performance of various stock market indexes. As with all universal life policies, charges for expenses and the costs of insurance are deducted from the policy’s account value monthly. Periodically, the insurance company calculates and adds a credit to the indexed account balance, based on the change in the value of an index during the period. This can lead to gains in the policy’s cash value when the indexes perform well.

But what if the index performs poorly? Luckily, indexed universal life policies usually include features that shield policy owners from losses if an index’s value declines. In exchange for this protection, most indexed policies are also subject to a cap on any gains.

Is an Indexed Universal Life Insurance Policy right for you?

An indexed universal life insurance policy may have advantages for people who want potentially higher returns for their universal life policy cash value than a fixed-interest-rate universal life policy might provide, but with less risk than a variable universal life policy.

If you’d like to learn more about how an indexed universal life insurance policy can fit into your financial plan, talk to a Farmers Insurance agent. Our knowledgeable agents can show you how life insurance may help you protect your assets and reach your financial goals.

The information contained in this page is provided for general informational purposes only. The information is provided by Farmers and while we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to this article or the information, products, services or related graphics, if any, contained in this article for any purpose. The information is not meant as professional or expert advice, and any reliance you place on such information is therefore strictly at your own risk.

IC-0915-A 09/15

Tips to Grow Your Money

From buying your first car to building your dream house, financial discipline takes a strategy

Sticking to a financial plan is like committing to a regular workout regimen: Everyone seems to have the best intentions, but before long, real life gets in the way of discipline and plans can go out the window.

There are ways though, for even the least frugal of us to start building a nest egg. Making small changes part of your everyday routine can grow that stash and help you protect your future.

One of the most important realities to face is that there is no better time than right now to make your financial security a priority. Take a look at the infographic below to see how putting your money to work for you sooner rather than later can pay off. Then use our handy calculator to see how different amounts, periods of time and rates of return can affect your long-term balance sheet.

Need some help to get started? Try the following tips to help you:

  • Identify your financial goals.
  • Craft a blueprint for achieving them.
  • Understand some readily-available tools to help you stick to the plan you’ve created.

1) Track expenses and budget accordingly

Ask yourself: What are you spending on certain items and why?

A simple search for “budget apps” or “money management apps” will bring up any number of free services that you can use to get immediate feedback on your budget and expenses – in real time right on your smartphone. These apps are designed to identify shortcomings and help you cut back on a gradual basis. They’re also with you at all times, and much more productive than checking Facebook every few minutes.

Analyzing your expenses can be a jarring experience at first, but each time you do it, the more honest you will be with yourself and the more comfortable you will grow in devising your strategy.

2) Set specific goals

Ask yourself: What are you planning for?

A sound strategy requires deadlines and objectives, so knowing what you’re planning for is as important as the planning itself. Aim to accrue a certain amount by a given date. It’ll give you something to shoot for, and even if you don’t meet the mark, that’s okay! The most important thing is making a plan in the first place – it’s much easier to feel good about your accomplishments if you know what it is that you want to achieve.

It’s also worth considering two sets of reserves – one for emergency expenses, such as car repairs or unexpected medical costs, and one for long-term goals, such as retirement.

3) Pay yourself first

Ask yourself: Would you miss some money if you never saw it?

Most financial advisors insist on paying yourself first. That means automatically depositing a portion of your paycheck directly into the vehicle of your choice before any bills are paid. The idea is that if you don’t see the money you’ll be less likely to miss it (or spend it). Before you know it, you’ll have established a considerable reserve fund.

It’s not as much about the percentage you’re setting aside as it is establishing realistic terms for your budget. If you can’t afford to set aside 10 or even 5 percent each month, that’s fine, as long as you’re setting something aside. If you begin earning more, you can reassess your strategy and adjust the figures accordingly.

4) Tools of the Trade

Ask yourself: What are some options that will not only protect my money, but help it grow?

Short term tools:

  • A checking account should be used to manage your incoming and outgoing money and pay bills. Many banks and credit unions offer free checking accounts with direct deposit from your employer or with a minimum balance. Checking accounts may protect your money better than holding onto cash, but they generally don’t encourage your money to work for you. For that, you may need other options.
  • Interest-bearing savings accounts allow easy access to your money but are not as transaction-friendly as a checking account. Savings accounts are a simple way to set money aside for holiday expenses and vacations, but also leave your money vulnerable to an impulse buy. Savings accounts usually have lower returns than other vehicles that limit your ability to withdraw funds.
  • For a short-term investment that may have better returns than a savings account, you could try a Certificate of Deposit (CD). The amount you put in the CD receives a fixed interest rate and generally has a maturity date after one month to five years. You cannot withdraw money from it ahead of time without incurring a penalty.
  • A money market account may offer a higher interest rate than a savings account by requiring a higher minimum balance, and by limiting the number of withdrawals.

Long term tools:

For longer-term planning, consider qualified retirement plans that allow you to defer a portion of your salary into the plan and reduce your present income-tax liability by reducing taxable income.

  • The most common retirement account is the 401(k), which is usually provided through an employer, but you can also establish an independent 401(k) if you are self-employed. A portion of your paycheck is deferred to the account until you reach retirement age, and employers also frequently contribute to help the account grow.
  • There is also an Individual Retirement Account (IRA), and you can choose between a traditional IRA and a Roth IRA. Distributions from the Roth IRA are tax-free, while those from the traditional are not. Keep in mind that a variety of factors, including your age and tax bracket, may restrict your ability to choose one over the other.
  • You also have the option of purchasing an annuity. Generally, you place your funds into it earlier in life for a source of income at a later date, usually during retirement. The key points regarding annuities are that they provide income tax-deferred growth, meaning their value grows pre-tax, but you do have to pay income tax on distributions from them. Perhaps most importantly, you cannot outlive your income from an annuity.
  • Life insurance is another interesting option to help achieve financial goals. While this tool’s primary function is to provide life insurance coverage to help protect your family’s assets in the event of your passing, a permanent life insurance policy can also be used as part of your financial strategy. Life insurance may allow you to tap into the policy’s cash value income tax-free^^ for any number of long-term expenses – college tuition, retirement plans or down payments on a home – without the same restrictions applied to many of the alternatives.

IC-0315-A 06/15

^ For informational purposes only. 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.

^^Distributions from a life insurance policy in the character of partial surrenders (withdrawals) up to basis or policy loans will 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.

^^^As with other helpful tools, the information provided by this calculator is for illustrative purposes only and is not intended to offer any tax, legal, or financial advice. It is always a good idea to consult the appropriate professionals for advice specific to your situation.

1 Life insurance, annuities and accidental death insurance issued by Farmers New World Life Insurance Company, 3003 77th Ave. SE, Mercer Island, WA 98040.
Products & features may not be available in all states & may vary by state.
* Securities offered through Farmers Financial Solutions, LLC, 30801 Agoura Rd. Bldg. 1 Agoura Hills, CA 91301. Member FINRA & SIPC.
* Products and Services/Auto or Home/Questions you may have about Risk Assessment Indicators

Parents of Teen Drivers

You knew this day would come, but who knew it’d be so soon!? Wasn’t it yesterday you were putting them in their car seat, pushing them in a stroller, and teaching them to ride a bike? Now they’re ready to drive! When the heck did that happen!?

Let’s be honest…parenting a teenager these days is serious business, (what with the Internet, social media, smart phones, texting, and all that loud music!) and getting them ready for the road can be terrifying. So to help make your teen smarter behind the wheel plus help stop your hand from shaking as you hand over the keys, here are 5 tips for dealing with a new teen driver:

1) Demonstrate good driving behavior early

They started copying you when they were babies (remember when they repeated that one word you wish they hadn’t?) so it’s no surprise that kids mimic your behavior behind the wheel, too! If you want your new driver to keep off the phone, stay calm, and focus on the road, remember to do that kind of stuff yourself. Think of yourself as a road role model, and drive that way.

2) It’s OK to let a Pro teach them

You’ve been teaching them stuff their whole lives (how to walk, tie their shoes, throw a baseball, talk to girls) so it makes sense that you’d want to teach them to drive too. But the reality is this is a tough time in both your lives. You want them to be the safest drivers on the planet…and they just want to grow up and drive away. That’s why hiring a professional driving instructor or signing them up for Driver’s Ed is a good idea. It may be unnerving, but they’ll get the right info and training. And this way, it won’t affect your relationship, or their maturity. It may even earn them an Auto insurance discount!

3) Set realistic boundaries

It may not feel like it sometimes, but kids crave rules and boundaries (even if they break them once in a blue moon). So talk to your kids early on and discuss their boundaries as new drivers. Maybe you don’t want them going more than 20 miles from home, driving with a bunch of friends in the car, or riding around after dark…at least for the first few months. Whatever guidelines you think are best, lay them down well in advance and you’ll avoid those big arguments when your teen starts driving. It may even help to write up a contract with them to sign, or give them rewards or more responsibilities as they gain experience.

4) Talk to them about the risks of driving…not just drinking and driving

You’ve probably been talking to your kids about drinking and driving for a while now, because since forever, that’s been parents’ biggest concern. But now we’re in a world of Smartphones, tablets, Smartwatches, satellite radio, and who knows what else technology is on the horizon! That means countless new distractions for drivers, young and old. So spell them out for your teen, and help them understand the dangers of distracted driving just as much as the dangers of drinking and driving.

5) Share driving responsibilities

As new drivers, it’s a good idea to give your teen excuses to practice their skills. Send them out to the grocery store, have them pick up their little brother from soccer practice, or ask them to drive Dad to the airport. It may take a little getting used to for you, but sharing the household driving responsibilities takes some of them off your plate. It’ll also expand their skills and get them ready for the boring realities of driving in the real world.

Ease Your Student Loan Burden

Student loan debt has become the bogeyman of the post-recession economy, haunting millions of Americans with lingering expenses. However, if you’re currently saving for college, there may be some respite from this financial horror story.

All it takes is some forethought and sound financial planning.

Avoiding a worst-case situation

It’s not an easy world out there. Millions of young adults have graduated into a dicey job market, and what’s worse, they’re saddled with student loan debt. Many feel like they’re stuck on a treadmill just trying gain a financial foothold.

The cost of college also has an impact on older generations. The parents or grandparents who co-sign these student loans may unwittingly assume the bulk of the payment responsibility.

Here are the facts:

  • The U.S. Consumer Financial Protection Bureau estimated that outstanding federal student debt totaled nearly $1.2 trillion as of the summer of 2013.
  • Of that outstanding debt, one out of five recipients had loans that were in deferment or forbearance. 8 percent of Direct loan recipients and 19 percent of FFEL recipients were in default.
  • About 90 percent of those private loans were co-signed, most often by a parent or grandparent.

It seems pretty clear then, that by dragging down credit scores, hurting job prospects and eating away at available income, these student loan obligations affect people in many ways, across multiple generations. And, in the most tragic scenarios, if a student dies, parents are handed the outstanding student loans of their deceased child, while dealing with personal loss and grief. Loans issued by a private servicer can’t be discharged like a federal student loan or credit card debt.

What’s a parent to do?

To balance their own retirement goals against the rising costs of college, parents have several financial planning options. You may not be able to avoid student loans completely, but these ideas may help you with paying them or reducing the amount of loans you may have to take. For instance, those who put down more upfront are likely to be less reliant on federal and private entities that fund higher education.

  1. Tax Advantaged 529 College Savings Plans* are investments created for a beneficiary to pay school-related expenses. Earnings in the account are income-tax free1 as long as the withdrawals are used for college expenses. Also, the person putting the money in the account retains control over it even when the recipient reaches the age of majority, so your child wouldn’t be able to use it, for instance, to buy a sports car without your permission and without having to pay taxes on the money.
  2. Buying a permanent life insurance policy is another option for parents. Permanent life insurance can be an option for parents looking to get out in front of payments for higher education. Permanent life insurance policies build cash value that policy owners may be able to withdraw or borrow from. 2
  3. Purchasing a juvenile permanent life insurance policy for children when they’re young can also help build savings for school. Purchase it now and the cash value will grow and may be accessed for education expenses. There’s no need to commit to where those savings go, but many policyholders purchase these policies with the intention of supplementing a college fund.
  4. Families who encourage their children to work before or during college to earn money to pay for school may end up with less to pay and be able to manage debt more easily.

It’s wise to consult with your Farmers Insurance and Financial Services Agent in order to determine which tactics may suit your family’s needs. What’s important, and probably comforting to know, is that there are other college-funding avenues that don’t include taking on mountains of student-loan debt.

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1 For informational purposes only. 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.

2 Distributions from a life insurance policy in the character of partial surrenders (withdrawals) up to basis or policy loans will 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.

The information contained in this page is provided for general informational purposes only. The information is provided by Farmers and while we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to this article or the information, products, services or related graphics, if any, contained in this article for any purpose. The information is not meant as professional or expert advice, and any reliance you place on such information is therefore strictly at your own risk.

1 Life insurance, annuities and accidental death insurance issued by Farmers New World Life Insurance Company, 3003 77th Ave. SE, Mercer Island, WA 98040.
Products & features may not be available in all states & may vary by state.
* Securities offered through Farmers Financial Solutions, LLC, 30801 Agoura Rd. Bldg. 1 Agoura Hills, CA 91301. Member FINRA & SIPC.
* Products and Services/Auto or Home/Questions you may have about Risk Assessment Indicators

5 Insane Hobbies That Life Companies Can Insure

We all have our weird little quirks and hidden interests. For some it’s cooking, stamp collecting, or knitting scarves for cats. But for the thrill-seekers amongst us, it could be scaling the face of some red sandstone in Moab, Utah, or carving waves in Malibu. After all, one person’s hobby is another’s death wish.

For you adventurous types though, there’s good news. Because even if you knowingly throw yourselves headfirst into danger, your Life insurance might still cover your nutty endeavors!

With a few notable exceptions, if you’re willing to pay for it and display a level of mature responsibility, you can get covered for all kinds of intensely terrifying interests, like:

1) Hang gliding

It may add to your Life insurance premium, but getting covered for converting yourself into a human flying squirrel is possible. If it’s what you love to do, with proper certification and experience you can cover your winged self.

2) Hot air ballooning

Most hot air ballooning accidents are minor…high winds usually veering the pilot off course. There are occasional “worst-case scenarios” but many insurers are willing to cover the avid hot air balloon captain who has experience and a pilot’s license.

3) Motorcycle sports

Insurers know there are responsible riders out there. But whether you ride to get to work or race round the track on the weekends, expect to pay an extra premium. Just make sure you take all necessary precautions. For instance, helmets are not an optional piece of equipment and being licensed is a must.

4) Rock climbing

Rock climbing as a blanket term is hard to cover. If you’re freestyle climbing in high altitudes without a harness and without a buddy, the odds aren’t in your favor. But there are ways to climb your way into a Life policy if you’re using the right equipment and displaying proper caution.

5) Scuba diving

You take on a ton of risks when you lean back off the boat and into the cold depths. And all of them make scuba diving one of the most risky activities to insure. But with lessons, reliable guidance, and (in a perfect world) certification, many policies will allow you to swim with the fishes while staying insured.

The name of the game is safety, precaution, experience, and honesty. Whatever your off-kilter hobby, make sure to get certified or licensed, wear all the safety gear possible, and tell your insurance company everything. If you do it right, your life insurance company may be willing to back up your ambitious escapades, and take on the risk. After all, according to the National Safety Council, more people get injured playing pool each year than climbing mountains.

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Don’t DIY Life Insurance

The internet age has made us all into DIY-ers. We can do just about everything ourselves and online, from shopping and working, to dating and watching TV. And we can do it all without ever having to actually speak to someone in person!

It truly is a brave new world.

But still, in this digital era we live in, there’s plenty of room (and need) for relying on “real people.” Because even with the entire wealth of human knowledge at our finger tips (and in our pockets), there’s a lot we don’t know. That’s especially true when it comes to our finances, and protecting our loved ones.

Experience Means Something

Although listening to the drone of a Life insurance agent as they go on about options and policies might not sound like much fun…this is one area of life where it may be helpful to consider the valuable information an experienced professional can provide, and not just DIY.

After all, accidents happen. Think about the fallout if you were to pass away. What would happen to your debts? Who would pay for your final expenses? It could be a financial hardship if one of your parents co-signed on a mortgage or a car loan, or someone else counts on part of your income. Life insurance, on the other hand, can help ease that transition and limit the potential burden.

And an employer’s policy may not be transferable. If you change jobs, take a sabbatical, or go back to school, you might lose your policy and not be covered.

Now, do you really want to hinge all that on some online quote, price comparison, or description on Wikipedia? Wouldn’t you rather take that off your plate, and allow a professional who’s been doing this for years help you protect what is important to you?

Have Someone on Your Side

In this post-recession economy still teetering toward sustainability, the role of the Life insurance agent has taken on a renewed significance. Life insurance agents can serve as a facilitator and educator, and can explain the specifics better than any web search could.

An experienced Life insurance agent can guide you through the nuances of Life insurance. They can get to know your specific needs, understand exactly what you’re looking for, and help you find a cost effective solution that may be more accurate than you would get with an automated online quote system. In fact, if you get Life insurance when you’re young and healthy, you generally get a better rate than you would if you wait till you’re older.

Also, agents have many sophisticated tools today to make the process quick and simple!

You may not think you’re ready to plan that far ahead, but it’s worth hearing what a real live (and experienced) human being has to say about your financial future. Consider putting aside your DIY instincts, reservations, and preconceptions. Introduce yourself to a Farmers Life insurance agent, and get yourself one of those old-fashioned personal relationships. You might be surprised to discover how much there still is to learn.

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Umbrella Insurance Gaps

In 2013 there were over 60,000 personal injury cases seen in U.S. courts, each averaging $60,000 in compensation payouts.

Although the trend in personal injury cases is down over 13% since 2009, they remain an everyday occurrence, and a serious risk to drivers, homeowners, and renters. That’s because so many things can lead to a lawsuit:

  • Someone slips down your stairs.
  • You’re at fault in a car accident.
  • A guest suffers an injury in your pool.
  • A neighbor falls off a swing in your backyard.
  • Your dog bites somebody.
  • Someone sues you for libel, slander, invasion of privacy, or defamation.

Not every lawsuit ends in judgments and compensation. However, whether you’re legally liable for damages or not, any legal action taken against you can pose a serious financial risk.

Between medical costs, legal fees, and other compensation, liability costs from a single accident can spiral out of control.

For instance, if you carpool to work and are at fault in an accident, you could be financially responsible for everyone’s injuries in the car (including anyone else injured in the accident). A single incident like that can put your entire future, your financial assets, and even your home at risk.

Where Liability Insurance Comes In

Liability coverage is part of many types of personal insurance policies. Auto, Home, Condo, Landlord, and Renters insurance typically provide it for legal action against the insured. Liability covers damages caused by the insured up to the policies’ limits, and can also cover defense costs (attorneys’ fees and other expenses) on top of the policy limits.

What puts you at risk, though, are the limits of that liability coverage themselves. The liability limits for each of your policies (Home, Auto, Renters, etc.) might not be enough for you.

Extended Liability Limits

For those concerned that there may be gaps in your coverage, and that existing liability limits might not be enough, there is another layer of protection available.

A personal Umbrella insurance policy extends liability limits beyond those available from other policies, like existing Home or Auto insurance. An Umbrella policy can add anywhere from $1 million up to $5 million in liability limits.

In the event of a catastrophic liability judgment or award against you, an Umbrella policy kicks in whenever the limits of the underlying auto, home, or other affected policy are exhausted.

For example, if that carpool accident leads to $1,000,000 in liability claims, but you only have $500,000 in Auto liability coverage, your Umbrella policy would go in effect, covering the remaining $500,000.

An Umbrella policy can also extend your liability limits to fill other coverage gaps:

  • Covering you anywhere in the world. Cause an auto accident in Italy? An Umbrella policy covers liability claims wherever they occur.
  • Covering claims other policies don’t. Your existing Auto, Home, or Renters policy might not cover lawsuits filed against you for libel, slander, or defamation of character, while an Umbrella policy will.

Lawsuits are prevalent in our modern world, and a single incident can have a dramatic effect on your assets, your home, and your future. If you’re concerned that even the highest limits of your existing polices aren’t enough to cover your assets the way you want, consider a personal Umbrella policy.

To fill gaps in your insurance, talk to your insurance agent or provider.

The coverage provided by the Farmers Umbrella Policy is subject to policy terms, conditions and exclusions.

The information contained in this page is provided for general informational purposes only, and is not meant as professional or expert advice. Every attempt is made to ensure accuracy and timeliness, however all content is presented without guarantees.

Retirement Planning for Every Decade

No matter what your age, it’s never too early to start building the nest egg you need for a comfortable post-work lifestyle. Whether you’re in your 20s or your 50s, there’s no better time than now to make retirement planning a priority.

In your 20s

We know retirement isn’t even a speck on your financial horizon yet, and that’s okay! The money you set aside now has the best potential to grow over the next few decades. Sock away just a little bit from every paycheck to ensure that you’re financially ready to buy a car, a house, or travel in the future. Learning to budget and sticking to it now will help set you up for financial success for the rest of your life.

In your 30s

If you don’t already have it, life insurance will never be less expensive than it is right now. Permanent life insurance policies can build up cash value that you may tap into later if you leave the workforce. The right life insurance policy may potentially grow on a yearly basis without subjecting your funds to the same market fluctuations found in other retirement savings vehicles. Also, unlike 401(k)s, IRAs and other retirement plans, you can generally access the cash value of a whole life policy at any time.

Risk can be your friend. Volatile stocks and higher-risk mutual funds may have a higher rate of return in the long run than more stable investments. It may be worth your while to explore your investment options and diversify your portfolio, depending on your circumstances and risk tolerance.

In your 40s

  • Make an appointment with a financial planner to help map out the next 25 years.
  • Look into maximizing your employer’s 401K match, and explore tax-deferred IRA options.
  • Speaking of your employer, now is the time to understand your employer’s defined benefit pension plan. Jumping from job to job may mean you lose some important benefits in the long run.

In your 50s

  • If you happen to get a lump sum windfall from a life insurance payout, estate settlement or other source, consider putting it into an annuity.
  • Annuities are contracts in which an insurance company pays you a specified amount in return for contributions paid in. These payments can last for a specific timeframe or even for a lifetime. This creates a source of regular earnings retirees can depend on, helping you avoid outliving your assets.
  • While your other investments are percolating, consider safe places for some of your liquidity, such as treasury securities, certificates of deposits and money market accounts. As these funds mature, you can pour them into the annuity, too.

In your 60s

  • Retirement and Social Security: Retirement ages are moving further and further out on the timeline. Every year you can put off taking money out of your retirement plan, it has a chance to grow. The same is true of Social Security. You will maximize your Social Security payout if you work until you are eligible to receive 100% of the benefits. If you were born after 1959, full benefits start at age 67. You can delay receiving Social Security benefits until age 70 — the longer you pay into the system, the larger the monthly payment you will get out of it.
  • Home Equity: If your house is more than you need, you may consider downsizing to a smaller, low-maintenance home, or moving to an area with a lower cost of living. The equity you get from your home may provide a boost to an annuity that could start paying out immediately.
  • Permanent Life insurance: If you need some extra income now, the permanent life insurance policy you purchased twenty years ago may be a potential source. Withdrawals from your cash value are generally considered a return of premiums paid, so the money you take out is not taxed. Policy loans that you don’t pay back may lower the death benefit.

6 Tips for a Rewarding Retirement

Keith J. Weber, certified financial planner and author of Rethinking Retirement: How to Create the Life You Want Without Waiting to Retire, says, “A large proportion of baby boomers will not be able to afford to retire the way they’d like to. Many will have no choice but to continue working. It’s very different than the dream.”

But Weber says the key to a happy retirement is to, “have a purpose or find something you love to do, and do it for as long as you possibly can, whether you need the income or not.”

Weber has identified activities people should pursue within six “life arenas” to have a rewarding retirement:

  • Engage in a fulfilling purpose.
  • Practice financial maturity.
  • Continue personal growth and development, including spirituality.
  • Connect with family and friends.
  • Maintain health and wellness.
  • Develop leisure and lifestyle interests.

© 2009 – 2012 WEBER CONSULTING GROUP, LLC

Retirement planning doesn’t have to be daunting task. Whether you’re starting a new job or winding down your career, it’s smart to have a strategy in place for your golden years. The key is to set your plan in motion early so you can live your life on your terms later.

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This material is for general informational purposes only and is not legal or tax advice. The material may not reflect your particular circumstances. Neither Farmers Insurance nor any of its agents, employees, or registered representatives is authorized to provide tax or legal advice. Please consult your tax or legal advisors for advice specific to your situation. Carefully read the contract prior to purchasing any life insurance or annuities. This material presents our general understanding of current law, as tax laws and IRS administrative positions may change. This material is not intended to, and cannot be used to avoid any Internal Revenue Service penalties.

Charitable Donations with Life Insurance

You took a smart step toward providing financial security for your family when you purchased life insurance. But did you know that you can use that same life insurance policy to help a cause near and dear to your heart?

According to the nonprofit organization Life Happens, over 95% of U.S. households donate nearly $3,000 (on average) to charities each year.

If you wish you could give more, but don’t think you have the resources, some experts suggest taking a look at your life insurance policy.

Making a charitable gift through your life insurance can be a win-win for you and your favorite charity. With wise legacy planning, it’s possible to not only stretch your donation dollars and establish a legacy or endowment that lasts, but also benefit from some tax breaks too.

“People may need guidance to merge their financial planning or retirement strategies with philanthropic goals to maximize the impact,” says Tom Robb, Director of Advanced Markets for Farmers New World Life Insurance Company “Your life insurance professional is a good place to start.”

2 Ways to Gift Life Insurance

1) Name a charity as a beneficiary

Whether it’s your church, school, or local shelter, you can make a significant impact on an organization you care about, by naming the charity as a beneficiary in your life insurance policy. Like any beneficiary, the charity will receive the proceeds of your policy upon your death. And while you don’t receive an income tax deduction, your taxable estate is reduced.

2) Donate a life insurance policy

You can also choose to donate full ownership of a life insurance policy to a charity. This type of donation lets you give a monetary gift far beyond your budget. You simply contribute a modest annual premium on the policy that can eventually lead to a considerable payout to the charity after your death. As a reward, you receive tax deductions because the charity owns the policy.

Small Investments Now Can Lead to Big Donations Later

“You can name the charity as a beneficiary on your policy.” says Robb. “Or you can turn the donation you’re already making into something with real impact. Leverage your donation by giving dollars for premiums today that can become a much larger gift later upon your death.”

For example, a supporter of a charity may make a $1,000 donation to an organization each year with the intent for the charity to buy a $100,000 policy insuring the life of the supporter. The individual may then receive a $1,000 income deduction for the gift, while the charity ultimately receives a $100,000 payout at the time of the person’s death.

In addition to these options, there are other ways to structure your life insurance gift to meet your unique financial and philanthropic goals. Consider working with your Farmers agent to discuss your life insurance needs. A smart legacy giving plan furthers your long-term financial strategies, while helping you make ample donations to groups you care about…and that’s a legacy you can be proud of.

IC-0115-A 01-15

1Life insurance, annuities and accidental death insurance issued by Farmers New World Life Insurance Company, 3003 77th Ave. SE, Mercer Island, WA 98040. Products & features may not be available in all states & may vary by state.

This material is for general informational purposes only and is not legal or tax advice. 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. The material may not reflect your particular circumstances. Neither Farmers Insurance nor any of its agents, employees, or registered representatives is authorized to provide tax or legal advice. Please consult your tax or legal advisors for advice specific to your situation. Carefully read the contract prior to purchasing any life insurance or annuities. This material presents our general understanding of current law, as tax laws and IRS administrative positions may change. This material is not intended to, and cannot be used to avoid any Internal Revenue Service penalties.

Final Expenses: Consider Costs

There are two truths to talking about your final wishes. The first is that talking about your final wishes is admittedly dreadful, and nobody wants to think about them. Unfortunately though, the second truth is that funerals can be expensive and sometimes unexpected, so not talking about it while you have the ability can be costly to your family in the future.

The most recent statistics from the National Funeral Directors Association (NFDA) show that the average funeral costs around $7,000.

What makes them so expensive, and how can arrangements you make now help keep future costs down for your family?

Looking at what makes up the cost of a funeral can help start the conversation:

  • Casket: This will probably be the largest expense of the funeral. Starting at around $2,400, caskets can get into the five-digit range if you’d like to be buried in gold or bronze.
  • Embalming: This service isn’t always required, but it’s necessary if there is going to be a viewing or visitation. The service costs about $700, according to the NFDA.
  • Memorial Service: The NFDA says that services cost about $2,000. This involves planning, obtaining proper permits and copies of the death certificate, preparing notices, holding the remains and coordinating with the place where you plan to hold the service, according to Funeral Planning 101.
  • Grave site: The price of a plot in a cemetery is a bit tricky to estimate because there are so many variables. Funeral Planning 101 indicates that most plots start around $1,000, although it’s certainly possible to find a more affordable one. Many people choose to buy their plots ahead of time to know they’ll be with loved ones.
  • Transportation: It costs about $300 to use a hearse to bring the deceased to the funeral home and about $130 for a service car or van, according to the NFDA’s statistics.
  • Obituary: Having an obituary written may be free in a small town newspaper, according to How Much Is It. If you’d like to be memorialized in a larger publication, though, it may cost up to $600 depending on the day you run the obituary, whether you include a picture and how long the biography is.
  • Gravestone: A flat grave marker usually costs less than $1,000, as the International Southern Cemetery Gravestones Association estimates, while an upright one may cost up to $10,000. Prices vary based on the material and color you choose. Marble is the most expensive, but there is also granite, sandstone, limestone or concrete to name a few. Elaborate inscriptions can also add to the total, but if the deceased is a military veteran, you may be able to get a grave marker for free.
  • Flowers: Funeral flowers can cost between $200 and $1,000 for a complete package, including the bouquet, spray and boutonnieres.

If traditional burial methods don’t meet your needs or beliefs, or they sound too expensive, there are other alternative choices. Not all are less expensive, but each is worth considering.

Here are seven alternatives to traditional burial:

1) Cremation

This is the most popular alternative to burial. More than 40% of Americans chose cremation in 2012, according to the NFDA. According to the Cremation Association of North America, cremations are less than half the cost of traditional burial. Some choose to keep the remains of their loved ones in an urn, but you might like to have them scattered in your favorite spot. Make sure to check that you are permitted to do so.

2) Natural burial

Another alternative is natural burial, an option provided by at least 50 cemeteries in the U.S. Instead of being embalmed and put into a sealed casket, the body is wrapped in a shroud or biodegradable casket, placed in the ground and allowed to decompose. Not only does it cost less, but many find comfort in knowing their body will enter back into the earth.

3) Burial at sea

This is a tradition often performed by navies, but civilians may partake as well. You can either scatter cremated remains in the sea, or leave the body intact. Veterans of any branch of the armed services and their family members are eligible for sea burial from a U.S. Naval vessel. Civilians have many sea burial services to choose from, such as Sea Services.

4) Bios Urn

This is another natural option. Ashes are put into a biodegradable urn created by Bios Urns that is buried and will germinate into a tree. After cremation, the urn costs just $105 and you can choose from a variety of trees.

5) Eternal Reefs

This option can be expensive, but if you are a lover of all things aquatic, it may be the choice for you. Eternal Reefs is a company that makes coral reefs out of cremated remains. Starting at about $4,000, your body can become a habitat for sea life.

6) Rocket launch

Ever dream of going into space? Celestis Inc. is a company that launches cremated remains into space. There are a few options with this particular company, from a brief space flight that returns to Earth starting around $1,000, to being launched to the moon or deep space for $12,500.

7) Donate to science

Your body can be used in medical schools and anatomy labs to help educate students. If you’d like to have your body preserved in a semi-recognizable form, there’s plastination. You could even be put on display and posed as if you’re in the middle of normal activities, like playing basketball.

These are several options available for your future burial. Just make sure you plan ahead now to help ensure your loved ones are financially prepared in the event of your passing. Life insurance1 can help pay for your final expenses, but that’s just one example of how proceeds from a Life policy may be used. Your beneficiaries may be able to use life insurance proceeds to help replace income, pay the mortgage and fund education, for instance.

The last thing you want is for your family to not only grieve losing you, but also get set back thousands of dollars by your funeral costs, whatever and whenever it may be. Start having the conversation now to save your loved ones extra heartache and stress.

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The information contained in this page is provided for general informational purposes only. The information is provided by Farmers and while we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to this article or the information, products, services or related graphics, if any, contained in this article for any purpose. The information is not meant as professional or expert advice, and any reliance you place on such information is therefore strictly at your own risk.

1 Life insurance, annuities and accidental death insurance issued by Farmers New World Life Insurance Company, 3003 77th Ave. SE, Mercer Island, WA 98040.
Products & features may not be available in all states & may vary by state.
* Securities offered through Farmers Financial Solutions, LLC, 30801 Agoura Rd. Bldg. 1 Agoura Hills, CA 91301. Member FINRA & SIPC.
* Products and Services/Auto or Home/Questions you may have about Risk Assessment Indicators

How to Lower Your Life Insurance Rates

Life insurance may be a good thing to consider, especially as you start to build a family. But let’s be honest…there may be plenty of other stuff you’d rather spend your money on.

So how can you get quality Life insurance for the future and still save for the things you need now, like new jeans, a bigger data plan, or a down payment on a home?

Life insurance applications ask a basic set of questions to assess your overall health and lifestyle, and underwriters determine your risk – and your premium — based on your answers. Here are a few steps you can take to help keep your Life insurance premiums as low as possible:

1) Get Life insurance when you’re young

You may be able save a few Benjamins on Life insurance if you get it when you’re young and healthy. Life insurance companies base your premium on how likely you are to pass away while you still have the policy, so rates tend to go up as you get older and face more health risks.

2) Don’t smoke

Smoking is an expensive habit. $5.50 on average for a single pack! That’s more than $2000 a year if you smoke a pack a day. But smoking can cost you even more when it comes to Life insurance. Generally, a smoker’s rates are around double or triple the rates of a non-smoker. Life insurance companies care because, on average, smokers die 10 years earlier than non-smokers. So, if you are a smoker, it may be in your best interest to quit. Underwriters at Farmers Life® say you can offset some of the rate difference in as little as two years by staying smoke-free.

3) Keep your driving record clean

Safe driving does a world of good for your Auto insurance…and it may do the same for Life insurance rates, too. That’s because, according to the National Safety Council, Americans have a 1 in 112 chance of dying in a car accident (that’s a huge risk!) And, according to the Centers for Disease Control and Prevention, nearly 1/3 of all traffic-related deaths are due to alcohol impairment. So if you have a less-than-spotless driving record, this will increase your premium compared to a safe driver (all other underwriting considerations being equal).

4) Stay healthy

A long, healthy life is its own reward. But if you stay healthy, a lower Life insurance premium is a good one, too! If the coverage you’re applying for requires a medical exam, health factors like your blood pressure, height and weight (BMI), cholesterol and health history are important to your underwriter. They’ll also consider things like drug and alcohol addiction, mental health, and your family’s history with both. Pre-existing conditions like cancer or diabetes may not prevent you from getting insurance, but you may have to pay higher rates because of the health risks. You can’t always prevent diseases and disorders, so properly managing the conditions you have, eating right and getting plenty of exercise can lower your risks, and help keep Life insurance premiums down, too.

5) Stay grounded

No, we don’t mean you should just be yourself and not sell out (although that’s solid advice too). Keeping your feet on the ground (literally) may help save money on your Life insurance. Airborne hobbies like piloting a plane or hot air balloon, hang gliding, skydiving, and rock climbing are relatively high-risk. That means you may have to pay more for your Life insurance if that’s what blows your hair back. Similarly, scuba diving and motor sports may increase your premiums, too.

6) Bundle policies

If you’re thinking about Life insurance, you may already have some other big investments. Maybe you have a car, a house, a boat, or a business…and all of those things need insurance. But if you bundle your insurance policies, and get them all with one company, you may be able to save with multi-line discounts. Ask your agent if you qualify.

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The information contained in this page is provided for general informational purposes only. The information is provided by Farmers and while we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to this article or the information, products, services or related graphics, if any, contained in this article for any purpose. The information is not meant as professional or expert advice, and any reliance you place on such information is therefore strictly at your own risk.

8 Must-Ask Questions About Life Insurance

Are you convinced that life insurance is important for you, but don’t want to spend weeks running around comparing rates and providers?

Let’s cut the small talk and give you the information you need to have one conversation with your agent, save time, and still get the coverage you want.

Here are eight critical questions to ask your agent about life insurance. Keep in mind, these probably aren’t the only questions you have, but they’re the ones you won’t want to leave without asking.

1) My employer provides life insurance. Why should I buy more?

The group policy your employer provides may be affordable and easy to enroll in without a medical exam. However, group policies may only pay an amount equal to one or two years’ salary, or a similarly limited amount. That may not be enough to cover your family’s needs (mortgage payments, education costs, living expenses) if you pass. Also, you may not be able to take it with you if you change jobs. Having a personal policy to supplement your employer-provided policy makes sense to ensure coverage during all the ups and downs in your life.

2) Does term or permanent life insurance make more sense for me?

Premium rates for term policies are typically lower than those for permanent ones (if applying for the same coverage), but there are tradeoffs. For one, premiums on term policies typically go up substantially at the end of the initial term – usually 10, 20 or 30 years. And, if you stop paying premiums for any reason, you are no longer eligible to receive death proceeds and your family’s financial future could be at risk.

Term policies are good for financial obligations that end, like a home mortgage or education costs.

On the other hand, permanent policies are good for retirement planning, income replacement, and ongoing financial obligations like caring for a family member with a disability. Permanent policies can accrue cash value and stay in force as long as you pay the premium. They may require a medical exam but usually have fixed premiums that won’t go up even if your health takes a turn for the worse.

It’s an important decision to make and an important question to discuss with your agent.

3) Will my survivors receive Social Security benefits?

If you’ll need to replace your income for your loved ones if you were to die, you may be counting on Social Security to cover some of the burden. The reality is that, in most situations, Social Security benefits are only paid out if a surviving spouse is over 60 years old or has children under the age of 18. If that doesn’t describe your situation, you should consider life insurance to help make up the difference.

4) Will I be covered if I become disabled?

Most life insurance policies have a variety of optional benefits, called riders, which may be available for an additional cost.

  • Disability riders may cover paying your policy premiums while you’re disabled and may supplement your lost income.
  • An accelerated death benefit rider lets you collect a portion of the policy’s death benefit if you become terminally ill with a short life expectancy, such as one year.
  • A critical illness rider pays a lump sum if you’re diagnosed with one of the critical illnesses specified in the insurance policy, such as cancer, heart attack, stroke, kidney failure and others. Instead of reimbursing you for medical expenses, the way health insurance does, a critical illness rider provides money to use for any purpose during the course of treatment.

Every insurer has their own selection of riders, so be sure to ask what’s available with your policy.

5) Will my premiums increase?

It depends on whether you have term or permanent insurance. With term life coverage, your premiums start out lower than comparable permanent coverage and stay fixed for the initial term. If you choose to keep your policy in force past the initial term, the premiums will likely go up. With permanent life insurance coverage, though, as long as you don’t let your policy lapse, your premiums are guaranteed not to increase for the rest of the owner’s life.

6) Do I need to get a medical exam?

Maybe not. Many companies now offer no-medical-exam life insurance policies for qualified applicants. You answer a few medical questions during a simplified application process and the application may be reviewed in less than 24 hours. The older you are, the more health issues you have, or the higher the face value of your policy, the more likely you are to be subject to a medical exam.

7) Are there any exclusions?

This is an important question because life insurance has no standard policy. Policy terms, prices, and exclusions may vary widely by company. But in general, insurance companies are in the business of offering coverage to as many customers as possible, not turning business away. Many activities such as scuba diving and mountain climbing that might have been excluded in the past are often accepted for an additional premium. Even people who have some chronic illnesses may find coverage if they’re willing to pay more. Most companies have a suicide exclusion, though, for the first year or two the policy is in force.

8) How can I save money without sacrificing coverage?

Short answer: by buying now. No matter how old you are, you will never be younger than you are today. Age can be a significant factor in determining premiums. Many multi-line insurers offer special rates on either the life policy or the home or auto policy when you bundle your policies with one company, so ask if the company offers any incentives. Paying premiums annually can also save money on the fees often associated with monthly installments. Lastly, on certain products, going paperless on your payment modes may help you save, if you chose to pay with a bank check plan.

IC-0914-B 9/14

1 Life insurance, annuities and accidental death insurance issued by Farmers New World Life Insurance Company, 3003 77th Ave. SE, Mercer Island, WA 98040.
Products & features may not be available in all states & may vary by state.
* Securities offered through Farmers Financial Solutions, LLC, 30801 Agoura Rd. Bldg. 1 Agoura Hills, CA 91301. Member FINRA & SIPC.
* Products and Services/Auto or Home/Questions you may have about Risk Assessment Indicators

How to Write a Will

When it comes to topics that aren’t fun to think about, our own mortality ranks among the worst, right up there with getting audited by the IRS. Of course, death and taxes are paired together for a reason: They’re both as inevitable as they are unpleasant.

Unfortunately, admitting it’s a rather unsettling topic doesn’t make it any less important to plan for the inevitable, and that means making sure you have an updated will. If you were to die, you can have peace of mind now, knowing your assets will be passed to your loved ones according to your wishes.

Here are the steps to take and the elements to keep in mind when you draft your will:

The Basics

1) Understand what a will is

You’ve probably heard the term before, but a will is a legally enforceable document that provides instructions as to how you want your property distributed after your death. This may include, but not be limited to, instructions on:

  • Where your money should go.
  • Who will take ownership of any real estate you own.
  • A guardian for your children.

2) Know how you write a will

Wills can be as basic or as elaborate as you wish. You can even write out your will right now on a sheet of paper, although without witnesses or a notary, it might not be legal in your state. There are other, more professional means, though. Dozens of computer programs and templates are available to help you write a will, and many attorneys specialize in wills, probate and estate law.

To be safe and legal, though, it’s important to:

  • Work with a lawyer to draw up your will.
  • Have at least two witnesses there to verify that you signed it yourself.
  • Have the will notarized.

For a will to be valid, you must be in sound judgment and mental capacity at the time you sign it, and, in most states, you must be at least 18 years old. You don’t have to file it with any government agencies, but be sure it’s clearly marked as your will, and kept in a safe, but not hidden, place.

Elements of a Will

1) Your Assets, or What are you willing?

Whether it’s a long list or a short one, it’s important to make a list of all the assets you own. Include all of your:

  • Bank accounts
  • Credit cards
  • Investments
  • Retirement funds
  • Properties
  • Money that will be paid from your life insurance policy

Certain assets that are countable in your estate will pass directly to heirs by operation of law rather than by operation of your will and the probate process. These include, but are not limited to, life insurance policies, annuities, IRAs and qualified plans like 401(k)s.

Keep in mind that this list can and should be updated frequently as your assets and life changes.

You can even account for social media in your will just as you would any other property. You can appoint an online executor – someone to manage or close your email accounts and profiles. Your executor should have a list of any websites where you have a profile, along with your user names and passwords.

2) Your Beneficiaries, or Who are you willing to?

The people whom you designate to receive your assets are called your beneficiaries. In most cases, these include your spouse, children and immediate family. Beneficiaries can also be organizations that you want to support, life-long friends, or even total strangers. Just remember to include both primary and secondary beneficiaries in case the primary ones die before you or don’t meet the conditions for getting your assets.

You can get as specific as you need to in your will, to make sure that your son inherits your heirloom pocket watch or your granddaughter gets your car. You also have the right to specify certain conditions for getting your assets. Now, you might not be able to make your cousins stay one night in a haunted mansion, but you can set aside money for your daughter contingent on her graduation from high school or for your nephew to start that small business he’s always wanted. Specifics like these may not be legally binding in some states, which is one reason you should consult a lawyer.

2.5) What about your kids?

If you have minor children, you need to decide who will become their guardians. In most cases, that’s the surviving parent, assuming you share custody, but it still needs to be specified in the will. You’ll also need to pick a legal guardian should something happen to both parents. This decision should not be taken lightly and, just as importantly, it should be discussed with the potential guardians.

3) Your Executor, or Who makes sure this happens when you’re gone?

What good are all these decisions and wishes if no one carries them out? That’s where the “executor” comes in. This person is named in the will, and ensures that your estate is divided up as you will it. For obvious reasons, this should be someone you trust. He or she will also be responsible for paying any debts that are associated with your estate and distributing your remaining assets. According to USA.gov, the executor is legally obligated to follow the wishes written in the will. You can consult an attorney to help you determine who is the best choice to be your executor.

Important Questions to Ask

What happens to your will after you die?

  1. After you die, your executor will file paperwork with the local probate court. (Probate is a legal process that takes place after someone dies.)
  2. During probate, your executor proves your will is valid.
  3. Once that’s been validated, he or she will inventory your property, pay debts and taxes, and distribute the remaining property as the will (or state law, if there’s no will) directs.

An important difference between wills and life insurance is that life insurance is a contract between you and the life insurance company and the death benefit will go to your beneficiaries (with few exceptions) – not probate.

What can happen if you don’t have a will?

Dying without a will (known as dying “intestate”) can be a problem for your loved ones, and make the pain of dealing with your passing all the more frustrating. Laws vary from state to state. In most situations, the bulk of your property goes to your next of kin, usually your spouse or children. However, depending on the state, your property may:

  • Go to your spouse, even if you have children together.
  • Get divided up among your spouse and descendants.
  • Become a battle between parents and siblings.

Even if you told everyone in your family what you wanted, if it’s not in writing, your wishes may not be followed.

Discussing what will happen after your death is not pleasant, but it’s an important thing to do. When you feel the time is right, talk to a lawyer and start drawing up your will. Remember, it can be changed or updated at any time. Then have a chat with your family to make sure they know what to expect after your passing.

For informational purposes only. 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.

IC-0914-C 09/14

1 Life insurance, annuities and accidental death insurance issued by Farmers New World Life Insurance Company, 3003 77th Ave. SE, Mercer Island, WA 98040.
Products & features may not be available in all states & may vary by state.
* Securities offered through Farmers Financial Solutions, LLC, 30801 Agoura Rd. Bldg. 1 Agoura Hills, CA 91301. Member FINRA & SIPC.
* Products and Services/Auto or Home/Questions you may have about Risk Assessment Indicators

Being Prepared for Important Milestones

No matter what stage of life you’re in, you always should consider what would happen to your loved ones if something were to happen to you. Getting Life insurance means having a safety net in case of a tragedy, so a personal misfortune doesn’t become a financial catastrophe. You can get an idea of how much insurance will be most beneficial to you and your loved ones by recognizing what’s happening in your life. Here are some milestones that can prompt you to think about your Life insurance needs.

Fresh out of School

You’re young, single, new to the workforce and ready to take on the world! So how much Life insurance do you need? Assuming you’re not making mortgage payments and don’t have any dependents, you probably don’t need much. Essentially, you’ll want enough to cover final expenses if something were to happen to you. Ask your boss or a Human Resources (HR) rep at work, since there’s a good chance you can get a modest policy through your employer.

Know though, that most employer-based Term Life insurance doesn’t go with you if you get a new job…and it doesn’t accumulate cash value, so it’s important to buy your own coverage. Since Life insurance premiums go up with age, it’ll probably never be cheaper to get a policy than it is right now.

Newlywed

You’re a little older, more mature, and more settled. Maybe you’ve bought a home with your new spouse. Even if your partner is gainfully employed, would he or she be able to cover mortgage, homeowners insurance, property taxes, and other expenses without your income? Even if they could, for how long?

If you haven’t already, consider investing in a Life insurance policy to make sure your spouse can handle the financial responsibilities alone if anything should happen to you. This is also the best time to think ahead to retirement, because life insurance can help with that, too. Choosing permanent insurance now means more time for the cash accumulation in your policy to grow, and you can lock in more affordable rates when you’re young and healthy.

New Parent

You made a little person…a little person that depends on you for absolutely everything. It’s not a responsibility that should be taken lightly, and your Life insurance should reflect that. Whether you and your spouse each continue to work or one of you can stay at home with the kids, both of you are providing for the family. If something should happen to you, could your spouse and children get by?

Whatever your income situation, your spouse will have to make it on reduced earnings and will most likely have to pay for child care, as well. Start thinking about your children’s futures  now so you can be as prepared as possible when the time comes, and your family isn’t left high and dry if something happens to you.

Empty Nester

Your kids are off to college and beyond, and it’s just you and your spouse once again. Even if your mortgage is close to being paid off, there are still plenty of living expenses to consider. This is especially true if you’re getting close to retirement. Without a proper Life insurance policy, your spouse may have to dip into retirement savings to cover things like medical bills, funeral costs, and mortgage payments, leaving your family with a reduced nest egg. Make sure you have peace of mind as you head to retirement so you can plan for your dreams.

Retiree

You’ve done it. You’ve put in years of hard work, saved diligently and are ready to enjoy your golden years. While your family may no longer rely on the income you provide, you are now most likely living on a fixed income. That means any significant expense – hospital bills or a funeral, for example – can be devastating to your spouse’s remaining finances. Talk about these changes in your situation with your insurance agent. Keeping your Life insurance current will help your survivors cope with the financial reality of your passing.

No matter what milestone you’ve just reached, any Farmers agent can help you decide what Life insurance policy is right for you. Don’t hesitate to contact an agent near you.

IC-0814-B 09/14

1 Life insurance, annuities and accidental death insurance issued by Farmers New World Life Insurance Company, 3003 77th Ave. SE, Mercer Island, WA 98040.
Products & features may not be available in all states & may vary by state.
* Securities offered through Farmers Financial Solutions, LLC, 30801 Agoura Rd. Bldg. 1 Agoura Hills, CA 91301. Member FINRA & SIPC.
* Products and Services/Auto or Home/Questions you may have about Risk Assessment Indicators

Avoid Common Everyday Risks

You may be taking more risks than you think just by getting out of bed every morning.

If you’re planning on skydiving or trying your hand at bull riding, you probably understand it could be dangerous. But, we rarely consider the risks in our day-to-day activities, mostly because we do them without thinking.

Here are some everyday activities that may be more dangerous than you expected:

Transportation: To drive or not to drive (or bike or walk)

You probably know someone who has a healthy fear of flying. But it’s less likely that you know anyone who refuses to get into a car. In terms of risks though, people have it backwards.

According to the National Highway Traffic Safety Administration, more than 33,000 people were killed as a result of vehicle accidents in 2012. That’s one person every 16 minutes! A further 2.4 million were injured. Compared to those killed in plane crashes, the difference is staggering. Stats from the National Transportation Safety Board show there were 27 accidents during scheduled carrier flights that same year — and a grand total of zero people died as a result! Perhaps you should reconsider your preference to drive to your next vacation spot?

Biking

Biking is a popular way of getting around many of America’s great cities. It’s also good exercise and better for the environment than driving. But here are some risks to remember before you hit the streets. A report from the Pedestrian and Bicycle Information Center shows that about 49,000 bicyclists were injured in 2012, and 726 of them were killed. Almost a third of these happened because the cyclist was hit by a car. While cities have taken measures to make biking safer, such as adding bike lanes, the risk is real. Be sure to keep your eyes open when you strap on your helmet.

Walking

Walking is the easiest exercise you can get, but it can get risky if you’re not paying attention. Walking around on your cell phone, for example, can be dangerous (almost as dangerous as driving with one), as Ohio State University Professor Jack Nasar points out in his 2013 study. He found that more than 1,500 pedestrians were treated in hospital emergency rooms in the U.S. in 2010, and he estimates that number will double by 2015. Also, 4,743 pedestrians died in traffic accidents in 2012, reported the Pedestrian and Bicycle Information Center. So don’t let your smart phone cause more harm than good. Keep your eyes open, check out what’s going on around you, and remember good pedestrian safety practices – look both ways.

Exercising

For years, your doctor has been getting after you to be more active, but it’s so much more fun to spend time with Netflix than with your treadmill. Risk-wise though, maybe you’re making the right choice.

The Centers for Disease Control (CDC), says about 10,000 people end up in the ER each day due to sports-related injuries (that’s almost 1 in every 5 ER visits). So, while exercise is a key part of a healthy lifestyle, make sure you’re aware of the potential risks.

In the kitchen

Cooking is a great skill to have, but there are plenty of dangers lurking in your kitchen.

Let’s start with knives. A properly sharpened butcher’s knife is just asking for a finger to slice, right? Well, not really. In fact, America’s Test Kitchen says that a dull blade is significantly more hazardous than a sharp one because you have less precision and need more force to cut. With a dull blade, it can be easy to make mistakes with painful outcomes. According to data compiled by the CDC, unintentional cut/pierce injuries were the fifth-leading nonfatal injuries treated in hospital emergency departments for people over the age of 15. So be sure to keep your knives sharp and in a hard-to-access place, and be extra careful when using them with food.

Now for a risk you might never consider: your sponge. After just a handful of uses, it’s probably full of bacteria that are easily transferred to the next plate you wash. If you don’t want to replace your sponge regularly, make sure you microwave it for a minute or run it through the dishwasher.

Around the house

Watch out!

Even if you never step foot outside your house and keep away from your kitchen, the rest of your home carries all kinds of risks. According to the Electrical Safety Foundation International, we tend to take electricity for granted. More than 30,000 non-fatal shock accidents occur each year, and about 60 people die of electrocution. If your honey-do list includes an electrical project, you might want to call a licensed electrician.

And did you know more than 200,000 people get hurt in their bathroom each year? The CDC says eight out of 10 of those injuries were falls, so take your time getting in and out of the shower tomorrow morning. In addition, falls anywhere in the home killed more than 25,000 people in 2009, according to the National Safety Council.

Facing the risks

This article may be intimidating, but of course you shouldn’t be afraid of everything you do! It’s just important to recognize the risks in your daily routine. That’s where an Accidental Death Benefit (ADB) policy or rider can help you. Accidental death is any death not caused by nature. ADB policies are usually recommended for those who frequently work in hazardous environments, but it can be a worthwhile investment for any of us because of the risks we all face everyday.

Accidental death is the fifth-leading cause of death across all age groups according to the CDC, so there are a lot of reasons to add it to your existing Term, Whole Life, or Universal Whole Life policy, or consider getting stand-alone coverage. Get more information right here on Farmers.com, or talk to a Farmers agent today.

IC-0814-B 08/14

How to Conquer Your Fears

For much of his early childhood, Mark Yatman of San Francisco battled with reading and writing disabilities. They limited his ability to socialize and engage in grade school curriculums, and kept him reading at a grade level two to three years lower than his peers. Not surprisingly, he developed a phobia of attending class and of public speaking altogether.

Even with tutors and after-school reading programs, Mark retreated into a sort of mental paralysis. Mark’s fear might not be categorized as extreme, but its potential long-term effects were still very real. His fear—what he felt —had become a phobia, a persistent anxiety about certain situations that kept him from fully experiencing his life.

Fear of heights, swimming near sharks, and speaking in public are common human fears. We all experience fear from time to time, but Helpguide.org says if avoiding the object, activity, or situation that triggers your fear interferes with your normal functioning or keeps you from doing things you would otherwise enjoy, it’s time to seek help.

Fortunately, aware of his affinity for science fiction, Mark’s mother bought him comic books as a last-ditch effort. Despite his difficulty wading through the text, Mark’s desire to know more about Batman and Wolverine helped him overpower his fears. Soon, the boy who had struggled to get through half a comic book was devouring science textbooks, then Jules Verne, H.G. Wells, and even the truly horrifying Mary Shelley.

In time, Mark was reading at a level equal to that of his classmates, and, perhaps more importantly, deriving strength from his struggles with reading and speaking in public.

A More Confident You

Fear, in its purest sense, is an important evolutionary function. It can be a powerful motivator, as long as it doesn’t consume us. Learning to confront fears in healthy ways, especially when we’re young, can offer opportunities for personal growth as we confront a wide variety of stressful situations as we get older.

As University of California-Berkeley Counseling and Psychology Services Fellow Samuel Tourek, Ph.D., explains, this is a function of the “profound sense of accomplishment” we can gain from mastering our fears. “This has tremendous implications for our understanding of self, as well as our understanding of the world as a benevolent place,” Tourek says.

Tourek explains that “facing the fear head-on and surviving to realize it’s not as bad [as expected] – can be traumatic if not done carefully.” Therefore, Mark’s mother’s decision to tackle the issue by tapping into her son’s known interests was a savvy, even life-altering one.

Today, Mark speaks to people every day as part of his job, whether over the phone or in person. His ability to confront his fear – with the help of his mother and some practical techniques- turned what was once a weakness into a strength and sense of confidence.

“All this was because my mother took the time to understand what I was actually interested in and adapted it to help me overcome what could have been a devastating fear,” Mark says.

For Mark, it’s about speaking and reading aloud regularly. For someone else, it may be about swimming laps daily to confront issues with getting in the water, or going on small hikes to get used to high elevations.

People who overcome their fears gain a sense of self-affirmation that can be truly empowering. By beginning with the basics, such as identification and acknowledgement, then working on more specific methods for tackling and overcoming the fear, we can achieve true personal growth.

Control and Conquer

Taking control of your fears is daunting, whether it involves getting into the water because of a fear of sharks, being able to go to the top of the Space Needle because of a fear of heights, or overcoming academic struggles at a young age.

So how can you face your fears and learn to embrace the situations that stop you in your tracks today? Helpguide.org suggests breaking the process down into steps that make the challenge less daunting as a whole:

1) Face your fears, one step at a time

The most effective way to overcome a fear is by gradually and repeatedly exposing yourself to what you fear in a safe and controlled way. During this exposure process, you’ll learn to ride out the anxiety and fear until it inevitably passes. With each exposure, you’ll feel more confident and in control and the fear begins to lose its power.

While it’s natural to feel scared or anxious as you face your fear, you should never feel overwhelmed by these feelings. If you start to feel overwhelmed, immediately back off. You may need to spend more time learning to control feelings of anxiety (see the relaxation techniques below), or you may feel more comfortable working with a therapist.

2) Learn relaxation techniques

Relaxation techniques such as deep breathing, meditation, and muscle relaxation are powerful antidotes to anxiety, panic, and fear. With regular practice, they can improve your ability to control the physical symptoms of anxiety, which will make facing your fear less intimidating.

3) Challenge negative thoughts

When you have a fear, you tend to overestimate how bad it will be if you’re exposed to the situation that causes anxiety. At the same time, you underestimate your ability to cope. It can help to put these thoughts to the test. Begin by writing down any negative thoughts you have when confronted with your fear.

Negative thought: “The elevator will break down and I’ll get trapped and suffocate.”

Then come up with some positive coping statements that you can tell yourself when facing your fear. For example: “I’ve felt this way before and nothing terrible happened. It may be unpleasant, but it won’t harm me.”

©Helpguide.org. All rights reserved. Helpguide.org is an ad-free non-profit resource for supporting better mental health and lifestyle choices for adults and children.

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The information contained in this page is provided for general informational purposes only. The information is provided by Farmers and while we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to this article or the information, products, services or related graphics, if any, contained in this article for any purpose. The information is not meant as professional or expert advice, and any reliance you place on such information is therefore strictly at your own risk.

Life Insurance Can Help You Buy a Home

Buying a home for the first time?

You’re about to take a small step into a much greater world! A world of down payments and mortgages…but also a world of building equity and house warming presents!

There’s a lot to learn as a new homeowner, and you’ll get there. In fact, you’re probably saving for your down payment now, and reading all about Homeowners insurance to cover your new home. But did you know Life insurance can also contribute to that down payment, and even help cover you as a new homeowner?

Before the Sale

Borrowing from your Life insurance policy

First of all, some Life insurance policies let you borrow from your policy’s accumulated cash to pay for major expenses. That means, if you have a Permanent Life insurance policy, a part of the premium (the cash value) is set aside in an accumulation account.

You can use this cash to help with your down payment. Plus, it doesn’t need to go through a traditional lender, since you’re basically just borrowing from yourself! That potentially means no loan payment required and it’s not taxable1 because it’s usually not considered income by the IRS.

(If you don’t pay back the loan before your death, that amount plus any unpaid interest will be subtracted from your death benefit. So keep up with a regular loan payment schedule and repay the money as soon as you can so your family is able to take full advantage of your Life insurance policy upon your death.)

Cashing in a Life insurance policy

If you haven’t had the policy long enough to build much cash value, another potential source of funds may be in a policy taken out by your parents or grandparents. They might have taken out a Life insurance policy on you a long time ago and may be able to access the cash value to put towards a down payment.

The Life insurance policy you take out on yourself may then provide you with financial options down the road.

After the Sale

Covering the mortgage

You’ll probably have to get Homeowners insurance to cover expenses if your home gets damaged. But what if something happens to you, and your family can’t pay the mortgage?

Each year, more families lose their homes when the mortgage payer passes away than from foreclosure due to fire and other catastrophes. Life insurance is one way to help make sure that doesn’t happen to your loved ones. A suitable Life insurance policy can help your family stay afloat, make the mortgage payments, and maintain their lifestyle, even if you’re not there to provide the income. Without it, a sudden loss of income could mean your spouse has to sell the house or deal with the foreclosure process.

Employer-provided Life insurance

If your employer provides a group Life insurance policy, it’s more than likely a Term insurance plan, which may not be convertible to Permanent Life insurance. Term Life insurance covers you for a specific period and only pays out if you die during that stretch of time. Permanent insurance means you’re insured for your entire life (provided you continue to fund the policy as required by the contract), and may allow you to borrow from it for major expenses.

Plus, you may lose your group insurance if you switch companies, so it’s important to take out a policy independently of your employer.

To learn more about how a Life insurance policy can help you as a homeowner, talk to a Farmers Agent or get a Life insurance quote today.

IC-0714-C 07/14

1 Distributions from a life insurance policy in the character of partial surrenders up to basis (withdrawals) or policy loans will be tax-free, provided that the policy does not violate Modified Endowment Contract (MEC) guidelines and the policy does not lapse. MEC guidelines govern the relationship between premiums or cash value and death benefit.  Policy lapse during the life of the insured can cause the owner a single taxable event for the policy cash value growth accessed in or before the year of lapse.

5 Life Expectancy Indicators

We all want to live long and healthy lives. So you do what you can. Maybe you eat right, exercise, and quit base jumping…because you know there’s a correlation between lifestyle and life span.

Over the years though, scientists and doctors have linked life expectancy to all kinds of other odd things, from personality traits to driving records. And these days, there are some interesting connections circulating in the medical community.

For instance, did you know the following can help predict your life span:

1) How fast you walk

No, you can’t instantly tack on an extra couple of years by picking up the pace trying to catch a bus. But a University of Pittsburgh study, published in the Journal of the American Medical Association, found that walking speed and gait was linked to body mass index, blood pressure, smoking history and even chronic disorders. The research concluded that a faster walking speed is associated with a longer life expectancy.

2) How you take care of your teeth

Better start flossing! A 2012 study in the Journal of Aging Research found a wide range of correlations between dental care and mortality rates among the elderly. The study showed that people who flossed regularly over a 17-year period had a 30% lower mortality rate than their sore-gummed equals. And those who went to the dentist in the past year stood a 50% greater chance of survival than those who didn’t! Now, keep in mind this study only evaluated a senior population, but generally it looks like taking care of your chompers may make for a longer life.

3) How quickly you can push a button

If you’re quick to push people’s buttons, your life expectancy may well end up shorter. But it turns out if your reaction time is sharper (and you can actually push a button quickly), you may live longer. A survey conducted by the Centers for Disease Control and Prevention, concluded that slow reaction times lead to increased risks for premature death and cardiovascular issues. Obviously plenty of other symptoms usually accompany slower reaction times (like obesity, low activity levels, etc.) but sharpening those motor skills may be another way of getting up there in years.

4) How educated you are

It’s time to hit the books, because an additional four years of education is proven to tack on as much as a decade to the average American’s life span, and the link is even stronger for women! Now like most of these observations, this is just a correlation, and there are plenty of socioeconomic factors that play a role here. But the fact is, as far as surefire life expectancy indicators go, your level of schooling is one of the most reliable.

5) How well you get back up

Life is all about taking the hits and moving forward…building character, and rolling with the punches. But we’re not talking metaphors here. Because apparently, how quickly you literally get yourself back up can predict your life span. A December 2012 European Society of Cardiology report confirmed that people who have a hard time standing up from a sitting position from the floor are nearly seven times more likely to pass away in the next six years, than those who could easily stand up.

Long story short? Leading a healthy lifestyle and scheduling regular check-ups with your doctor are tried and true ways of living a longer and healthier life. Still, the little things matter more than you may realize. And these correlations prove that cutting corners, whether it’s skipping the floss or skipping class, can catch up to you in the end.

IC-0614-A 06/14

Seasonal Cholesterol Shifts

Cholesterol has become a dirty word over the years. We’ve all heard (or should have heard by now) to keep our levels in check for a healthy life. And since cholesterol’s been linked to heart conditions, high blood pressure, and an increased likelihood of plenty of other health risks, it’s good advice!

But now, a new study shows that cholesterol levels may change with the seasons. That means good warm-weather behavior may help undo some cholesterol upswings from wintertime habits.

The study, conducted by researchers at the Johns Hopkins University Ciccarone Center for the Prevention of Heart Disease, analyzed the lipid trends of some 2.8 million American adults who underwent cholesterol testing between 2006 and 2013. To look at seasonality, they also categorized patients by when they were evaluated.

The data confirmed what other studies had long suspected; there is a significant seasonal variation in cholesterol levels. For both men and women, overall cholesterol levels (including the bad cholesterol) were higher during winter months.

Why do cholesterol levels shift by season?

While it’s not true across the board, most people’s lifestyles change a lot between hot and cold months.

“In the summer, we tend to get outside, we are more active and have healthier behaviors overall,” said Parag Joshi, lead investigator of the study and a cardiology fellow at Johns Hopkins Hospital. “In the colder months, we tend to crawl into our caves, eat [fat-laden] comfort foods and get less exercise.”

Studies have shown healthier diets and exercise positively affect cholesterol levels. So, if our diets, exercise habits, stress, and overall disposition change between the seasons, it makes sense that cholesterol levels would vary too.

What can we do?

To help offset our natural lull and rise in cholesterol in winter time, try some minimal lifestyle changes:

  • Make winter habits more like summer ones.
  • Take a close look at your diet in winter.
  • Cut down your time on the couch.

And when spring and summer come along, foster the natural shift in cholesterol levels:

  • Walk to nearby errands instead of driving.
  • Eat more seasonal vegetables.
  • Get more sunlight.

It’s important to recognize that gradual lifestyle changes can instigate the health improvements that matter to so many of us.

Cholesterol and other health conditions can directly affect your Life insurance policy rates and day-to-day medical expenses. But this is one thing that’s in your control. So understand your cholesterol triggers, take a look at your seasonal habits, and make some small changes to reduce a range of risks and possibly change medical outcomes.

IC-0514-A 6/14

Help Prevent Identity Theft

Most of us think about identity thieves as some dark figure sitting behind a computer, hacking our online accounts, stealing our passwords, and wringing their hands menacingly all the while. But what if you didn’t know that identity thieves are real people, who use all kinds of brazen methods to physically get at your personal information too?

  • “Dumpster diving” identity thieves go through your trash to look for papers with personal information. Super gross, but true!
  • Some thieves file a change of address form at the Post Office and divert your billing statements to another location. So it may not be a good thing if you suddenly stop getting bills.
  • Old-fashioned methods like stealing your papers from your mailbox or from your purse work just as well too.

You can lower your chances of becoming a victim of these felonious attempts by going paperless! It makes managing your accounts easier, safer, and hey, with all the paper you save you’ll be eco-friendly too. So go ahead and slap that “Go Green” bumper sticker on your hybrid with even more confidence!

Of course, doing business online or over the phone comes with a few dangers as well. Stay alert for suspicious callers and fishy e-mails (no, that Nigerian Prince is not going to wire you one hundred thousand dollars…sorry). And whatever system you prefer, always monitor your bank and credit accounts closely.

What to Expect (Financially) When You're Expecting

Having a baby is one of the most exciting, awe inspiring, and slightly terrifying times in a couple’s life. You’re adorably arguing over baby names, painting the nursery, and shopping for cute onesies with clever sayings on them. It’s all good stuff.

Just remember…life is about to completely change!

That’s why it’s important to take stock of your finances, too, while you’re also stocking up on diapers. Because according to the US Department of Agriculture, it takes more than $240,000 to raise a child from birth through age 18. That’s a major chunk of change for everything from diapers, formula, and new clothes to future expenses like education and family vacations.

So to help put your mind at ease, here are a few tips to help new parents plan and get financially prepared for baby:

1) Set a budget

Wandering through baby stores can be a lot of fun, and it’s easy to get swept up in picking out cribs, rockers and cute stuffed animals. But while you obviously want to have all the essentials for baby, make sure you’re shopping smart. Do you really need the Cadillac of strollers when a less-expensive one works just as well? Could you use hand-me-downs instead of buying brand new stuff? Remember, you’re only going to need it for a few months to a year anyway. So there’s no need to go into debt buying that solid walnut nursery ensemble. Set a budget and stick to it.

2) Prioritize your savings

Yes, starting a college savings fund early on is vital. But saving for your retirement is important, too. Developing a solid financial plan that lets you put aside money for your kids and yourself is essential. After all, if you hit retirement age, can’t work anymore, but don’t have enough saved to live on, who are you going to turn to? So talk to a financial advisor to help you plan now, and have well-balanced financial options down the road.

3) Establish a will

If something were to happen to you or your spouse, what would happen to Junior? Wills aren’t just for the 1%. Anyone with kids should have one drawn up to make sure that your wishes are carried out if anything happens to you.

4) Apply for a Social Security Number sooner rather than later

Take advantage of your new income tax deduction! A Social Security number is an important document to access many health and human services benefits, and is required to claim your child as a dependent on your income tax return. Your child also may need a number if you plan to open a bank account or buy savings bonds for them, get medical coverage, or apply for government services. You can apply for a Social Security number for your baby when you apply for your baby’s birth certificate. Check out information on the Social Security Administration website now so you can apply as soon as possible.

5) Review your employer benefits

What’s your employer’s maternity or paternity leave policy? How long do you have to add your baby to your health insurance and what will it cost? Does your employer offer Life insurance or dependent childcare benefits for kids? Take a look at your employer benefits before the baby comes so you know what to expect and which benefits need updating.

6) Get Life insurance

When it was just you and your spouse, Life insurance helped ensure your partner could afford to pay the mortgage and avoid foreclosure or bankruptcy on a single income. Now, with a new baby on the way, you may want to rethink your Life insurance coverage. If something happened to you, will your spouse be able to afford child care or save for your child’s college fund? A Life insurance policy may help you protect your family’s financial future, even if you’re no longer around to do so.

In addition to Life insurance for yourself and your spouse, you may want to consider getting Life insurance for your little one. Insuring your baby will generally be less expensive in their younger years, and it can help protect their future insurability. You’ll help provide your child with a nest egg of their own that can be used for educational expenses or even to put a down payment a house further down the road.

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The information contained in this page is provided for general informational purposes only, and is not meant as professional or expert advice. Every attempt is made to ensure accuracy and timeliness, however all content is presented without guarantees.

Babyproofing the Modern Home

Baby Proofing Your Home in the Modern World

As expecting parents, new parents, or veteran “we’ve been there done that” parents, odds are you’ve done your homework on baby proofing. You know kids love to get into trouble. They climb things they shouldn’t, grab dangerous stuff, and put everything right in their mouths. You also know it’s your job to stop them by:

  • Watching them relentlessly.
  • Keeping dangerous stuff out of their reach.
  • Covering up absolutely anything they could hurt themselves with.
  • Keeping them in safe places.

But in our modern, device driven days, the standard baby proofing methods for getting this stuff done are changing. Gadgets, TVs, devices, and chargers fill our homes more than ever before. So while the classics of baby proofing (childproof drawer locks, corner covers, bathtub mats, etc.) are still vital to use, it’s smart to know some modern baby proofing techniques too:

1) Secure every TV.

Flat screen TV’s are the norm these days and we’re putting them in every room and on every conceivable surface in the house. But that can pose a serious problem to kids who love to climb and grab stuff. So wherever you put your TV, make sure it’s secured and bracketed down so they don’t fall or tip over.

2) Keep phone chargers and laptop cords away and out of reach.

Cords are serious dangers to children. But since most of us plug in our cell phones every night or keep our laptops charged while we use them, cords are just part of our daily lives! So while you don’t have to change your device habits, it is good to keep those cords away from your kids. Put chargers high up and out of reach. The same goes for power strips and extension cords. Try snaking them behind or on top of furniture where little exploring hands can’t get to them.

3) Secure your furniture.

Desks, chairs, tables, shelves, and other pieces of furniture are fun to climb on…but if they’re not secured with wall restraints or brackets, they could tip over.

4) Keep that video monitor out of their reach.

A lot of modern parents are using new video baby monitors instead of the classic audio-only ones. They’re visual, easy to use, and some of them even have night vision (pretty cool right?)! But remember that cords can pose a serious danger to young children, even video monitor cords. So if you use one, make sure it’s set up far out of their reach and away from the crib, or it’s wireless, so they can’t hurt themselves.

5) Use new outlet covers with sliding doors.

Classic baby proofing practices say to plug up electrical outlets around the house. And it works! But the thing is, sometimes we need to use those outlets, and getting the old plastic covers off is tough…even for adults! Plus, even when you get them out, they can pose a choking threat if you don’t pocket them quickly. So to get around all that, try using newer outlet covers with sliding doors. They give you quick access to the outlet if you need it, automatically cover it safely when you’re not using it, and you never have to remove them…so no choking hazards.

Let’s be honest though. In the real modern world, there’s no such thing as a 100% baby proofed house. Kids are innovative daredevils…they’ll climb stuff and get into things you never expected. You can read every book, take every piece of advice, and buy every fancy thing from every baby store and kids will still find ways of surprising you.

That’s why the best practice for baby proofing is always just to keep a watchful eye on your baby and keep them out of trouble! And after you’ve secured their environment, consider talking to your Farmers Insurance agent about Life insurance to help secure their financial future.

Just Married?

Insurance Documents to Update After Getting Married

Getting married is one of life’s biggest and happiest moments! Two lives become one as you exchange rings and tie the knot (cue sappy love song). But when the reception’s over and you’re back from the honeymoon, there’s a few small pieces of business you might want to attend to.

After you’re married, it’s important to update important documents, for example:

  • Review and update the “beneficiary” in your Life insurance policy
  • Do the same for your IRA, pension, or similar retirement accounts
  • Update the “beneficiary” and “next of kin” information for your Social Security benefits
  • Review your Will and power of attorney documents
  • Consolidate your insurance policies – add your spouse to your Home, Auto, and Life policies (With Farmers this could qualify you for additional savings!)

If you decide to consolidate your insurance policies after the wedding, make sure there’s no overlaps in coverage or you could be paying twice for something that’s already covered. Talk to a Farmers agent to learn more!

3 Reasons Why You Need Pet Insurance

If you’re a pet owner, you probably love your pets like family, and treat them just as well (maybe even better!). In fact, according to a recent study*, six out of ten pet owners (63.2 percent) consider their pets to be family members.

If you’re like most responsible head of households, you see the value in providing health insurance for your loved ones, so doesn’t it make sense to be equally prepared for your furry companions?

Many pet owners, though, make the mistake of thinking they’ll never need coverage for their pets, until it’s too late. But here’s why pet insurance is becoming a necessity rather than a luxury:

1) Pets get sick, too

Contrary to the common myth, cats don’t actually have nine lives—and neither do their canine counterparts. Our pets require frequent vet check-ups, and may even suffer from chronic illnesses or potentially devastating medical conditions that require immediate diagnosis and treatment.

As much as we’d like to think otherwise, pets aren’t superhuman. They’re not immune to sickness like allergies, diabetes, or cancer. And they’re just as accident prone as us humans, sometimes suffering from broken bones, lacerations, and injuries. In emergency situations, and with chronic vet visits, pet insurance can help you pay large and unexpected medical bills.

2) Rising animal care costs

Thanks to modern medicine, new drugs and advanced medical technologies are helping our furry friends survive and recover from once fatal conditions.

However, these developments in treatment quite literally come with a price. And, the cost of extensive or emergency veterinary treatment can cripple a typical household income.

While the average vet bill costs only a few hundred dollars, in the case of a critical illness or medical emergency, expenses add up quickly—and can run into the thousands (especially when extensive testing, surgeries, and medications are involved).

3) A financial safety net

Even if your furry family member remains healthy and accident-free throughout its lifetime, the peace of mind knowing pet insurance is there to help with the expenses can be worth every penny.

Purchasing pet insurance is a worthy option to consider for pet-owners who don’t always set aside money in their budget each month for out-of-pocket expenses related to pet illnesses or emergencies. Pet insurance can help a catastrophic illness or medical trauma from becoming financially devastating. Get an instant pet insurance quote online, to get started and find the plan that’s right for you.

*U.S. Pet Ownership & Demographics Sourcebook (2012)

The information contained in this page is provided for general informational purposes only. The information is provided by Farmers and while we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to this article or the information, products, services or related graphics, if any, contained in this article for any purpose. The information is not meant as professional or expert advice, and any reliance you place on such information is therefore strictly at your own risk.

Do I Need Umbrella Insurance?

If you’re even thinking about Umbrella insurance, chances are you might need it.

Ok, so obviously that’s not true across the board. But generally, if you’re worried that even the highest liability limits of your auto, home, or watercraft insurance wouldn’t be enough to pay for a large liability award, then extra Umbrella coverage might make you feel more protected.

That’s because Umbrella insurance extends the limits of your underlying liability coverage, and it can do it for a pretty small cost (usually somewhere around $250-$600 a year*).

But how do you know for sure that you need Umbrella insurance?

That’s a reasonable question. But to answer it, let’s turn the tables for a second, and ask you a couple of questions first:

  • Are you a high net worth individual? You may need to do a little math here. Remember that Net Worth = What You Own – What You Owe. If you do have a high net worth (say, around one million dollars or more), you may want to protect it against a big liability judgment with an Umbrella policy.
  • How exposed to risk are you? We’re not asking if you’re a secret agent, professional skateboarder, or stunt person. But if your day-to-day life exposes you to more than normal risk, it might be a good idea to extend your coverage. Do you spend a lot of time on the road? Do you host dinners and parties in your house? Do you have a pool? Do you have a vacation home?

If you answered yes to any of these questions, and you have a large income and assets you want to protect, you should consider an Umbrella policy to help you protect what you’ve spent a lifetime building.

The information contained in this page is provided for general informational purposes only. The information is provided by Farmers and while we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to this article or the information, products, services or related graphics, if any, contained in this article for any purpose. The information is not meant as professional or expert advice, and any reliance you place on such information is therefore strictly at your own risk.

Kasey Kahne’s Healthy Living Tips

Welcome to the Inside Track, where Farmers comes together with NASCAR driver Kasey Kahne’s No. 5 Farmers Insurance team at Hendrick Motorsports, to give you their professional advice on everything from auto maintenance to healthy living tips.

Kasey Kahne has a reputation for being one of the most physically fit drivers in the NASCAR Sprint Cup Series garage. For Kahne, working out and eating right is a lifestyle, something critical for his life on and off the track.

As fans, we can all learn a lesson from Kasey’s healthy living.

“I enjoy working out as much as I can,” said Kahne, driver of the No. 5 Farmers Insurance Chevrolet SS. “I tend to work out more early in the season than in the middle of the season when it’s the hottest out. In general, I’ll workout at least five or six days a week.”

Change it up

When it comes to his workout regimen, having a variety of activities is key for Kahne.

“I like running, biking and swimming,” Kahne continues. “Some of my favorite workouts are when I mix running with some sort of lifting. I might run one mile then stop to do 50 pushups, sit-ups, pull-ups and squats, and then run another mile and do another set like that.”

Keep it lean

Besides working out to prepare for the weekend, Kahne also eats lean on race day, focusing on foods that fuel his body to withstand the conditions he experiences inside the race car.

“My go-to race meal is probably chicken and salad so I eat pretty plain,” Kahne said. “I like eating simple foods on race day and not getting too full, either.”

It’s not all workouts and lean eating though! To stick to a healthy lifestyle it’s important to still enjoy what you eat…something Kahne knows all about.

After a long race weekend, Kahne likes to splurge a bit.

“On Mondays, I’ll enjoy Mexican dishes and really good heavy food.”

For Kahne and the entire No. 5 Farmers Insurance team, maintaining a healthy diet and a consistent fitness program both play important roles as they work each weekend to race into Victory Lane.

With 11 Sprint Cup Championships, Hendrick Motorsports is the most successful racing organization in NASCAR history. Kasey Kahne’s No. 5 Farmers Insurance Chevrolet SS is supported by some of the most talented engineers, mechanics and race strategists.

The information contained in this page is provided for general informational purposes only. The information is provided by Farmers and while we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to this article or the information, products, services or related graphics, if any, contained in this article for any purpose. The information is not meant as professional or expert advice, and any reliance you place on such information is therefore strictly at your own risk.

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