- Life Insurance
was founded by the Ohio Farm Bureau Federation, a consumer
group organized in 1926 by Ohio farmers. The early Farm Bureau
leaders decided to start an auto insurance company because
they believed that they were being overcharged by established
insurers. Although they knew little about insurance techniques
and practices, common sense told them it was only fair that
rural drivers pay less for their auto insurance because they
had fewer traffic accidents than city motorists.
on that belief, the Ohio Farm Bureau Federation incorporated
the Farm Bureau Mutual Automobile Insurance Company on December
17, 1925. Staked to a $10,000 loan, the company opened a one-room
office in downtown Columbus with three employees. Twenty part-time
agents volunteered to sell auto insurance policies without
commission to give the company a running start.
obtain a state license to operate an insurance company, Farm
Bureau was required by Ohio law to sign up 100 pledged policyholders.
Selling mostly on the basis of their faith in an untried but
logical insurance concept, the volunteer agents obtained 10
times the needed number within a few months. With 1,000 policy
applications, Farm Bureau Mutual officially started business
on April 12, 1926.
the outset, the new company offered only one product, auto
insurance, and only to Ohio farmers. It was so successful
in providing quality auto insurance at low rates that rural
drivers in other states sought coverage from the new company
response, Farm Bureau Mutual began to expand into other states
in 1928 with help from locally based "sponsoring"
organizations. It was a pivotal move that started the company
toward eventual national expansion. The first expansion state
was West Virginia. Others, all in 1928, were Maryland, Delaware,
Vermont, and North Carolina.
key decision, one that helped expedite company growth, came
in 1931 when Farm Bureau Mutual expanded its services to residents
of towns and small cities. In 1934, the company began insuring
motorists in metropolitan areas.
1943, when expansion was interrupted by World War II, Farm
Bureau Mutual was operating in 12 states and the District
of Columbia. The company resumed territorial growth in 1952,
and accelerated its national expansion in 1956.
reflect plans to grow countrywide, the Farm Bureau Mutual
name was changed in 1955 to Nationwide Insurance. During the
next 10 years, Nationwide expanded into 20 additional states,
including Oregon, the companys first state west of the
make all-around personal protection available to its customers,
the company began to offer fire and life insurance coverages
early in its history. It started a fire insurance company
in 1934 and bought a struggling life insurance company the
following year. The insurer was becoming a conglomerate in
the mid-1930s, long before it became a standard business practice.
into life insurance in 1936 was particularly notable. Having
agents sell both life and casualty insurance conflicted with
standard industry practice. Industry belief held that insurance
agents werent qualified to sell both life and casualty
insurance because those products are so different. Multi-line
selling, however, eventually became common practice.
moved ahead of the industry again in the mid-1950s when it
pioneered the sale of both life insurance and mutual funds
shares by its agents. It was a bold move that was viewed skeptically
and opposed vigorously at the time by both the insurance and
securities industries. Attitudes changed slowly, but many
leading insurance companies eventually followed Nationwides
lead into mutual funds.
Nationwide Life insurance is protection for the living
of us take great steps to plan for our future. You want to
know that your family will be provided for if you die. This
desire for security prompts many people to purchase life insurance
as part of their financial plan.
is life insurance?
Life insurance is a contract between you and an insurance
company. Basically, you pay the insurance company a series
of payments-or premiums-based on the type of policy that you've
purchased. In turn, the insurance company agrees to pay your
beneficiary a specified sum of money. The specified sum is
called a death benefit. Your beneficiary is the person that
you designate to receive the benefit from the insurance company.
Generally the payment your beneficiary receives is not subject
to federal or state income taxes. However, payments to your
beneficiaries may result in estate tax liabilities.
you need life insurance?
The purpose of life insurance is to provide funds to help
preserve your family's financial future. You should consider
purchasing life insurance if you have:
aging parent or disabled relative who depends on you for
your investments won't provide enough to support your
loved ones if you die
estate to protect.
life insurance coverage is needed to pay final expenses such
death of a loved one causes enough personal anguish without
adding financial problems. How would your family pay the bills
if anything unexpected happened to you? Your beneficiaries
may also need ongoing income to cover the:
living expenses, like groceries and utilities.
insurance can also keep personal business ventures afloat
and our estates protected. Most expenses will continue to
increase by at least the amount of inflation. You'll need
to consider this when you're deciding how much life insurance
you'll really need. Clothing, food and transportation are
just a few examples of costs that don't stand still.
the fit that's right for you.
Life insurance can be purchased in terms-for a certain period
of time-or on a more permanent basis-for life.
Nationwide Life Insurance Policies
A term policy provides life insurance coverage for a specific
period of time.
is pure life insurance.
does not accumulate in value.
you die within the designated time frame, your beneficiary
will receive the death benefit amount.
is the least expensive form of life insurance.
younger you are, the lower the premium-or price-you pay
for term insurance. This price break can help you buy
more life insurance coverage when you're young and need
to protect your young family's future.
insurance is often purchased to cover a specific financial
obligation, such as a mortgage payment, since you can select
the time period you want the insurance to cover. The premium
amount you pay for term life does increase with age, so you
may want to look into other available options for ongoing,
lifelong coverage. Term life premiums cover the death benefit
only and do not accumulate in value. When the specified contract
period ends, premium payments stop and coverage ends.
There are four types of permanent life insurance policies-whole,
variable, universal and variable universal. All offer coverage
for your entire lifetime and provide your family with money
should something happen to you.
permanent life insurance policies, your age is a determining
factor when premium amounts are set. Therefore, it can be
more economical to purchase permanent life insurance when
you're young. Permanent life policies are generally best suited
for the long term.
Whole life insurance provides protection for life. The
premium amount is fixed throughout the life of the policy
and is due in regular intervals. The payment, though, tends
to be higher than the premiums associated with term policies.
Part of the premium pays for the death benefit coverage, commissions
and fees. The rest is invested in the insurance company's
investment portfolio. This investment is called the cash value
of the policy. Cash value accumulates on a tax-deferred basis
until withdrawal or lapse of the policy. The cash value provides
a guaranteed minimum rate of return.
Variable life insurance
Variable life insurance is similar to whole life, in that
it offers coverage for life and fixed premiums for a specific
term or the life of the contract. The difference between whole
and variable life insurance is the treatment of the cash value
portion of the premium. Instead of the insurance company investing
your money in its investment portfolio at a guaranteed rate,
you hold the purse strings. This type of life insurance allows
you to invest the cash value portion of the premium into a
separate account and to direct where this portion of your
premium is invested. Investment options generally include
mutual funds that invest in stocks, bonds and cash equivalent
more about variable life insurance at Nationwide Financial's
The BEST of AMERICA web site.
Universal life insurance is similar to whole life insurance.
The difference is that your premium is flexible. How much
and how often you pay depends on the policy's cash value and
the size of the death benefit you choose. You can use the
cash value to reduce your out-of-pocket premiums; likewise,
a smaller death benefit would reduce the premiums. A flexible
premium can be ideal when you need to reduce your coverage.
Some policyholders choose to reduce coverage as their children
grow up. With fewer dependents living at home, the need for
a larger death benefit may not be necessary. Universal life
policies also build cash value with a guaranteed minimum return.
universal life insurance
Variable universal life insurance combines:
life's flexible premium payments
life's ability to let policyholders invest their cash
premium amount is flexible based on the size of your death
benefit and cash value policy. Plus, you control the invested
portion of your premium. This money is placed into a separate
account from your insurance company's investment portfolio.
You're allowed to direct where this portion of your premium
is invested. Investment options generally include mutual funds
that invest in stocks, bonds and cash equivalent investments.
cash value varies with the performance of the underlying investments
you select. The amount is not guaranteed. The cash value can
be taken in a lump sum if the policy is terminated. If the
earnings are greater than what the insurance company projected,
the death benefit can increase.