Country Thoughts

Life insurance to help protect your family in a dangerous line of work – farming

Did you know that September is Life Insurance Awareness Month? Life insurance is a topic clouded with misinformation around how much you need, what it will cover, and what it will cost.

One of the most common misconceptions is life insurance is for you.

While you may be the one paying the premium, life insurance is actually for your loved ones, and can protect them long after you’re gone.

A 2018 Insurance Barometer Study reported by Life Happens and LIMRA show that more than one-third of households would feel the financial impact within one month if the primary wage earner died.

Working in agriculture puts our farm clients in a dangerous line of work that can really turn a family upside down if something happens to their farm operator. Let’s take a look at some numbers:
• The agricultural sector is still the most dangerous in America with 574 fatalities, which equals 23.4 deaths per 100,000 workers, according to 2018 data from the U.S. Bureau of Labor Statistics.
• According to 2019 data from the USDA, 44% of principal farm operators list their farm work as their major occupation, while 39% may have another job as their occupation.
• The same USDA data shows the mean farm net worth to the operator’s household is just over one million dollars.

With those numbers in mind, life insurance is something a farm family should consider.

What are some other life insurance “misconceptions?” Let’s break them down:

Myth #1: I’m young, or maybe I don’t have a large family. I don’t need life insurance.

Whether you’re married or not, you may leave behind family and friends when you pass away. If you have any debt such as farm equipment, student loans, car loans, a mortgage, etc.; someone may be responsible for that debt, potentially your spouse or other family members. A life insurance policy can help cover your final expenses and take care of outstanding debts, especially if your family needs to keep the farm for future income.

Myth #2: The life insurance policy I have through my full-time employer (if working outside of farming) provides enough benefit.

Life insurance policies issued by employers are generally a great benefit, but are not always enough to protect your family should you pass away. Many companies will offer one to three times an employee’s base salary, but that may not be enough to pay for final expenses, outstanding debts, your mortgage and the loss of future income for your family.

Employer policies are also not guaranteed. If a company goes through hard financial times, the life insurance benefit could be taken away. Also, if you leave the company, you typically can’t take that benefit with you to your next job.

Talking with a professional can help you to fill in the gaps.

Myth #3 – Life insurance is too expensive.

The truth is, life insurance will never be as affordable as it is today. Rates are generally lower when you are younger and in better health, so don’t wait to find a policy.

Certain types of life insurance provide living benefits in addition to a death benefit. These policies may provide cash value that can be borrowed from*, and the money in a life insurance policy will generally grow tax-deferred.

One reality about life insurance is that it can offer peace of mind. It can help families sleep better at night, maintain their same standard of living and help kids to stay in their same school. To learn more about types of life insurance and what might be right for you, contact your insurance representative for a policy review.

*Policy loans and withdrawals decrease the cash value and face amount of the policy. The decision to purchase life insurance should be primarily based on a need for the death benefit. Policies are not an investment and are not appropriate as a replacement for retirement savings accumulation.