When you choose Farmers® New
World Life Insurance Company for your life insurance, you benefit from over
85 years of experience in helping families get back where they belong when
something unexpected happens. Farmers® New World Life has been serving the
needs of families and companies since 1910. Today, you join over one million
individual life customers and annuitants in choosing the strength and
security of Farmers® New World Life Insurance Company.
You'll feel secure knowing that our over 15,000 professional agents provide
a full range of products backed by an A+ (Superior) rating from the A.M.
Best Company, respected independent industry analysts.
Here are just some of the life insurance products we provide to meet your
Life Insurance is Typically Used -- There are many unexpected
The Difference Between Term Insurance and Permanent
Insurance -- Both offer options that cover specific insurance
Whole Life Insurance -- Permanent insurance with
Universal Life Insurance -- Permanent insurance
with varied payments.
How Life Insurance Is Typically Used:
- For any immediate needs at the time of death, such as final
illness expenses, burial costs and estate taxes
- For funds for a readjustment period, to finance a move, or
to provide time for family members to find a job
- For ongoing financial needs, such as monthly bills and
expenses, day-care costs, college tuition or retirement
The Difference Between Term Insurance and
Term insurance provides coverage for a specific period of time. It
pays a benefit only if you die during the term. Some term
insurance policies can be renewed when you reach the end of the
specific period. Others give you the ability to reenter. The
premium rates increase at each renewal date or each reentry. Many
policies require that evidence of insurability be furnished at
reentry for you to qualify for the lowest available rates.
Initially, premiums are generally lower than those for
permanent insurance, allowing you to buy higher levels of coverage
at a younger age, when the need is often the greatest.
Permanent insurance is designed to be a lifelong policy and is
known by a variety of names. As long as you pay the necessary
premiums, the death benefit always will be there. These policies
are designed and priced for you to keep over a long period of
Most permanent policies, including whole life, universal life,
adjustable life, and variable life have a feature known as
"cash value" or "cash surrender value." This
feature, which is not found in most term insurance policies,
provides you with some options:
Keep in mind that, with all types of permanent policies, the cash
value of a policy is different from the policy face amount. Cash
value is the amount available when you surrender a policy before
its maturity or your death. The face amount is the money that will
be paid at death or at policy maturity.
- You can cancel or "surrender" the policy -- in
total or part -- and receive the cash value as a lump sum of
money. If you surrender your policies in the early years,
there may be little or no cash value.
- If you stop paying premiums, you can use the cash value to
continue your current insurance protection for a specific
period of time or to provide a lesser amount of protection to
cover you for a longer period.
- You may borrow the cash value from the policy. If you do not
repay the loan with interest, your beneficiaries will receive
a reduced death benefit.
This is the most common type of permanent insurance. The premiums
for a whole life policy must be paid as scheduled in the amount
indicated in the policy. These premium amounts remain constant
over the life of the policy. The death benefit and cash value are
guaranteed as stated in the policy if premiums are paid when due
and there are no loans or withdrawals outstanding at the insured's
death. Quite often dividends may be credited to this type of
This variation of permanent insurance allows you, after your
initial premium payment, to pay premiums at any time, in virtually
any amount, subject to certain minimums and maximums. You can also
increase or reduce the amount of the death benefit more easily
than under a traditional whole life policy. Typically, current
interest rates are credited to the cash value in this type of
You Can Trust Farmers® New World Life Insurance Company.
Life insurance involves your trust and your money. To meet the long-term
commitment represented by your life insurance policy, The Farmers Insurance
Group of Companies is committed to safe and successful financial management.
Careful investments create a solid foundation, assuring continued stability
and future growth you can depend on. Farmers Insurance pursues relatively
high-quality, low risk investments with safety of principal being of
paramount concern. As of year-end 1998, our diversified portfolio included
the following mix of holdings:
A Key Ratio of Financial Strength
- Bonds: Over 85 percent of Farmers New World Life's total invested
assets are in bonds. Compare that to an industry average of 54 percent.
- Mortgages: Loans for mortgages account for 1.5 percent of our
portfolio, well below the 7.7 percent industry average.
- Real Estate: Real estate investments account for an additional 1.5
percent. These investments place a high priority on quality commercial
properties in stable markets spread across the western United States,
avoiding heavy concentration in any one area.
- Other investments: The balance of our portfolio is composed of various
other assets, including loans to our customers, backed by the cash value
of their policies.
An additional measure of an insurer's financial strength is its capital
ratio, which is the ratio of capital, surplus and investment reserves to
assets. Compared to the industry average of 10.6 percent, Farmers New World
Life's 1998 capital ratio of 20.7 percent displays an exceptionally strong
Superior by Industry Standards
The A.M. Best Company, respected independent analysts, annually review the
financial status of thousands of insurers. Best's ratings are assigned after
an extensive series of tests that measure company performance in competency
of underwriting, control of expenses, adequacy of reserves, soundness of
investments and capital sufficiency. Farmers New World Life has consistently
earned Best's rating of A+ (Superior). We've achieved that mark since 1976,
the year the ratings were introduced.
Another well-established industry analyst, Moody's Investors Service,
evaluated Farmers New World Life Insurance Company in 1998 and assigned an
Aa3 (excellent) financial strength rating. Moody's said "the rating
reflects the company's strong financials and its position within the Farmers
Insurance Group."Standard & Poor's have rated us Ap: (strong). And
our Weiss Research ratings is A-(excellent).
The Life Insurance Industry: Strong and Secure
The soundness of life insurers versus other financial service organizations
such as savings and loans and banks is brought into focus by differences
between them. Life insurers generally have a better geographic distribution
of business, a greater diversity of investments and are better capitalized
than either banks or thrifts.
Reserves and Surplus: The Legal Standards
Life insurance companies must maintain a reserve: a liability account that
reflects the difference between the value of future claims and future
premiums. Reserve requirements are set by state law.
Legal guidelines also require a life insurance company to maintain certain
surplus levels -- the excess of assets over liabilities -- as protection
against unanticipated claims and asset value fluctuations.
State Regulations Provide Further Security
Each insurer selling policies in a state must submit an annual statement of
its financial condition, and some states require an additional independent
auditor's report. State insurance departments periodically examine life
insurers, and if financial trouble is apparent, action is taken to conserve
assets or rehabilitate the company to protect its customers.
Before You Replace Your Whole Life Policy, Read
FNWL SecurAccount®: A Draftbook Instead of a
It seems there is an ever-increasing number of insurance companies and
marketing organizations that are specializing in replacing existing life
insurance policies. Sometime in the future, you may be contacted by an agent
from one of these companies and advised to surrender or cancel your Farmers
New World Life policy and replace it with one of their products.
The approach these replacers use often involves:
Many of these replacement specialists are classroom trained to use the same,
standardized sales approach, typically to destroy your confidence in both
the agent who wrote the original policy and your choice of coverage.
- A recommendation that existing insurance be cashed in and the
surrender values be placed with their company.
- The implication that the proposed replacement scheme will produce more
favorable results for the customer.
- A strong recommendation to purchase term insurance and never to buy
any kind of cash value, whole life policy.
- Sales material or third-party, non-industry literature that attacks
any kind of cash value, permanent life insurance, including universal
- Computer illustrations or projections, which can often look too good
to be true.
What they don't tell you is that Farmers® New World Life Whole-Life
insurance is only a part of a successful plan to protect your family, with
cash value savings that build toward your future while providing the
life-insurance you need. Before you decide to cash in any policy, visit with
your Farmers Agent and get all the facts. Your Agent has term insurance
policies that can increase the level of insurance you have, and you'll still
have the backing of Farmers New World Life (You Can Trust)
to get your family back where they belong should something unexpected
A Convenient Way for Your Beneficiary to Defer Important Financial
Research shows that beneficiaries (especially your spouse or children) do
not wish to face major financial decisions immediately following the death
of a family member. They need time to recover from the shock and grief that
often follows the loss of a loved one.
How about your beneficiary? How will he or she handle a large sum of money
from a life insurance policy at a very emotional time and other matters
press for attention? Will those funds be safe?
The FNWL SecurAccount®
Traditionally, life insurance companies make single, lump-sum benefit
payments to beneficiaries, unless other provisions are made. Farmers New
World Life has changed the way your beneficiary is paid. In most states, the
proceeds may now be deposited in an interest-bearing account, the FNWL
SecurAccount. The account is fully guaranteed by Farmers New World Life
Your beneficiary can use the FNWL SecurAccount almost as an ordinary
checking account. He or she has access to the entire amount simply by
writing one draft or withdrawing the proceeds in any increments over $250.
How It Works
After the claim has been approved, the proceeds will immediately be
deposited in an account opened in your beneficiary's name. (Not approved in
CO, KS and NC; SecurAccount must be affirmatively elected in WA, AR, and
NV.) Both principal and accrued interest are guaranteed by Farmers New World
Life Insurance Company.
To make this service as convenient as possible, your Farmers Agent will
deliver a complete FNWL SecurAccount packet to your beneficiary soon after
we open the account. The packet will contain a personalized draftbook, a
certificate confirming the deposit and an explanation of the service.
What It Provides
The FNWL SecurAccount is designed to provide many of the same services as an
ordinary checking account, including a monthly statement mailed to your
Any number of checks may be written, as long as each exceeds $250 and the
account balance does not fall below $250.
Life insurance is a valuable source of security to your beneficiary. We are
pleased to offer the added service of the FNWL SecurAccount. It will allow
your beneficiary the extra convenience of deferring important financial
decisions while earning a competitive interest rate.