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Don’t Bet the Farm


The Role of Life Insurance


Death and taxes: Nothing in the world is
more certain, as the saying goes. We can’t
cheat death. But we can be better prepared
for it.

Client Centered

For farm families, life insurance is like planting seeds of financial protection now and in the future. The primary reason for purchasing life insurance is the need to protect those you love financially in the event of your death.


The proceeds from a life insurance policy can be used to help pay for a number of financial needs, such as making mortgage payments, paying down debt, to be put toward college expenses or helping to fill other financial gaps. Whole Life, a type of permanent insurance can also be used to help supplement retirement.


Put Yourself on Your
Own To-Do List


“We know not everyone is equally informed, confident or comfortable talking about their need for life insurance,” says Alex Vasichek, a licensed Agriculture-Focused Financial Planner in Fargo, ND. “Oftentimes a family member will reach out to us after a friend, neighbor or distant relative passes away. That’s why we’re here.”


“We believe life insurance should be viewed as an important risk management tool,” adds Vasichek, “similar to other insurances, such as vehicle, equipment or crop Insurance.”



...life insurance should be viewed as an
important risk management tool...”


How Much Insurance
Is Right for Your Situation?


So how much life insurance do you need? There’s no one-size-fits-all so you’ll want to take into account considerations specific to farmers and other agricultural businesses. Your policy should be carefully tailored based on a combination of important financial and lifestyle factors, including:


  • Amount of debt owed
  • Size of your family
  • Annual income and income replacement need
  • Standard of living
  • Education expenses
  • Legacy planning



What Type of Life Insurance May Be Right for You?

There are two main categories of life insurance-Term and Permanent:

Term Life

Permanent Life

Provides coverage for a fixed period of time – often 10 20, or 30 years. If you die while covered by the policy, the death benefit is paid to your beneficiaries.

A type of permanent life insurance that covers you for your entire life. As long as you make your required premium payments, a death benefit is guaranteed to your beneficiaries whenever you die.

There is no cash value accrual, which can generally make these policies far less expensive than permanent policies.

It has the potential to build cash value that can be accessed during the policyowner’s lifetime.

May appeal to those who are looking for affordable coverage for a specific time, such as the length of your mortgage or for the years you’re raising a family – so that if you were no longer in the picture, that coverage would be there when your family may need it the most.

May appeal to policy owners who need the protection of the death benefit, but would also like the ability to access the cash value during their lifetime, to supplement retirement income, help pay for college tuition, or any other reason.


But keep in mind that tapping into the cash value reduces the future death benefit and increases the chance the policy could lapse, triggering a taxable event.





Is Life Insurance
Taxable?


It’s important to remember, regardless of which type of life insurance you choose, premium payments are generally not tax deductible.

Life insurance proceeds typically are not taxable, however the interest accrued on the proceeds from the date of the insured’s death may be taxable.


If you have specific questions, you should consult with a tax advisor or legal consultant.


Spring into Action


Now that your crops are in the ground, it might be a good time to take a few minutes to meet with a licensed life insurance professional, who has the specialized skills to write a customized agricultural-focused life insurance solution that fits you, your family and your legacy.

Client Centered

Alex Vasichek

Agricultural Focused Financial Planner