1. What Types of Life Insurance are there?

Farm Bureau Financial Services offers three types of life insurance—term life, whole life and universal life. Each serves as protection for your loved ones, but differs in price and coverage characteristics.

Term life insurance provides protection for a specific period of time, hence the name “term.” Term life insurance is purchased typically for 10, 15, 20 or 30 years and is designed for temporary circumstances. This type of life insurance makes the most sense when your need for coverage will disappear, possibly when your children graduate from college. It’s generally less expensive than whole life insurance, making it a popular choice for individuals and families in the prime of life.

Permanent life insurance offers lifelong  protection and you can accumulate cash value on a tax-deferred basis. The cash value can be used for multiple purposes if you get in a tough spot. The one downside is initial premiums are considerably higher than what you would pay for a term policy with the sameamount. 

There are two types of permanent life insurance: whole life and universal life. Whole life insurance premiums remain the same for life, and the death benefit and rate of return on your cash values are guaranteed. With universal life insurance,
you can seek potentially better returns by allocating your fixed premiums among investment sub-accounts, typically
comprised of stocks and bonds. Universal life insurance offers the flexibility of varying the amount of your premium  payments, as well as other tax benefits.

2. What are the Beneifts of Life Insurance?

The goal of life insurance is to ensure the safety and security of loved ones. Besides covering funeral costs, life insurance can be used for things like:

Keeping the business in the family. Certain taxes may apply when passing a family business
to the next generation, but life insurance can help cover these costs. It can help ease the tax burden on the future business owner and other family members.

Retirement. Certain types of life insurance policies build cash value over time that can be a form of income in retirement.

Mortgage or college. Life insurance can help protect your family from the obligations of making mortgage or college payments if your salary is no longer available to them.

Charity. You can also use life insurance to increase charitable giving in your community. Policy holders have the opportunity to make a larger gift than would otherwise be possible by designating a favorite charity as a beneficiary on their life insurance policies.

3. How much will life insurance cost me?

The cost of life insurance depends on your age, your health and the size of the death benefit you want. The younger
and healthier you are, the lower your premium will be. While everyone’s financial situation is different, consider these facts
by a 2016 Insurance Barometer Study:

• One in four people said they feel they need more life insurance protection.
• Nine in 10 agree most people need life insurance, but only 60 percent have it.
• Almost 90 percent of millennials overestimate the true cost of life insurance.

4. How much life insurance do I need

One of the biggest questions when talking about life insurance is how much you will need. Since everyone’s financial  situation is a bit different, there is no set rule. Is it $250,000, $500,000, $1 million or more? Each sounds like a lot of money, but when you have to pay for final expenses, outstanding credit card balances and other debt, the total can quickly add up.

As life changes, you should take inventory of your life insurance coverage. Take the next step to help protect your loved ones after you pass away and connect with a Farm Bureau agent. You can also check out our Life Insurance Calculator at
www.fbfs.com/landing-page/life-insurance-calculator.