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Financial Insurance - Farmers Insurance Group
- Details
- Category: Other
- Published on Monday, 19 July 2010 10:48
At Farmers® we don't just protect your assets, we can also help you build them. Farmers Financial Solutions, LLC offers mutual funds, variable universal life insurance, and variable annuities. Your Farmers Insurance and Financial Services Agent can help you with a financial strategy that fits your needs and objectives. So whether it's saving for retirement, college, or protecting your family, Farmers® can help you toward your financial goals and dreams.
For all your family's financial needs
It's never too early to start preparing, and it can be surprisingly easy to get started. Farmers Insurance and Financial Services Agents can help you with:
Prepare for Retirement:
- Traditional IRAs
- Roth IRAs
- 401(k)s and Rollovers
- Variable Annuities
Save for College:
- 529 College Savings Plans
- Coverdell Education Savings Accounts
- UGMAs/UTMAs
Life / Estate Protection:
- Variable Universal Life (Farmers Agents also offer a complete line of traditional life insurance products.)
Establish Investment Accounts:
- Individual Accounts
- Joint Accounts
- Corporate Accounts
Employer / Employee Benefits
- SEP / SIMPLE IRAs
- 401(k) Plans
- Solo 401(k) Plans
Mutual funds are one of the most popular investment products in America today. Their simplicity, accessibility and affordability make them popular with both novice and seasoned investors. A mutual fund is an investment that allows individuals with similar financial goals to pool their money with many other investors. The mutual fund's professional money managers invest that money in many different types of securities that meet the objectives of the fund. However, mutual funds are subject to investment risk including the possible loss of principal invested.
How can mutual funds help me?
Mutual funds offer investors:
- Simplicity - mutual funds are easy to invest in.
- Affordability - Investors can invest as little as $25 per month in some cases. Initial investments can start as low as $250.
- Professional Management - As a mutual fund shareholder, your investment is professionally and actively managed.
- Diversification - Because mutual funds invest in a number of different securities, your investment is diversified and is generally less volatile than an individual stock portfolio.
- Liquidity - Investors in mutual funds can generally sell their shares at anytime for the current net asset value. (Redemption fees or penalties may apply to certain liquidations and/or share classes).
A Farmers Insurance and Financial Services Agent can assist you in developing a strategy that can help you toward your financial goals.
Types of Mutual Funds
Farmers Financial Solutions, LLC offers a number of mutual funds managed by well known investment companies that provide Farmers® customers a variety of investment options to meet their financial goals and objectives.
Each fund company operates a little differently. Two basic categories of mutual funds are: equity funds that invest primarily in common stocks and income funds, that typically invest in bonds. Each category has several sub-categories. There are also balanced funds, which invest in both equity and debt securities.
| FUND TYPE | WHO SHOULD INVEST |
| EQUITY | |
| Growth funds | |
| These funds primarily invest in companies with a history of rapidly growing earnings and generally higher price-to-earnings ratios and seek long term capital growth. | These investors generally look for high levels of equities exposure, generally have a long time horizon and have a high tolerance for risk and portfolio volatility. |
| Growth-and-income funds | |
| These funds invest mainly in the common stock of companies with a history of growth and a record of dividend payments. The funds seek a combination of long term capital growth as well as some current income. | These investors generally look for moderately high levels of equities exposure and some limited income opportunities from bond exposure, along with longer time horizons and higher tolerance for risk and portfolio volatility. |
Equity funds are subject to market risk and may fluctuate as a result of specific events related to the companies or markets in which the fund invests. Market prices are subject to economic, political or social events. Foreign holdings are subject to currency fluctuations and small cap company securities may be more volatile. Equity funds tend to have large fluctuations in response to changing market conditions.
| FUND TYPE | WHO SHOULD INVEST |
| BALANCED |
|
| Balanced funds | |
| These funds will generally invest in a number of different investment types: common stocks, preferred stocks, bonds, and short-term securities and seek a balance between long-term growth of capital and preservation of capital as well as provide some income to shareholders. | These investors generally look for a combination of bonds and equities exposure and may have a moderate time horizon and tolerance for risk and portfolio volatility. |
Balanced funds are subject to market risk and interest rate risk and may fluctuate as a result of specific events related to the companies or markets in which the fund invests as well as interest rate changes and credit risk assessments. Market prices are subject to economic, political or social events. Foreign holdings are subject to currency fluctuations and small cap company securities may be more volatile. Balanced funds tend to have somewhat smaller fluctuations in response to changing market conditions than equity funds.
| FUND TYPE | WHO SHOULD INVEST |
| FIXED INCOME / BONDS | |
| Income funds | |
| These funds invest in corporate and government securities or municipal bonds, which are issued by corporations and state or local governments. Some municipal bond funds provide tax-free income. These funds seek to produce current income for shareholders. | These investors generally look for income-oriented investments, usually bond portfolios, but may include some limited equities exposure and may have a short to moderate time horizon and some tolerance for risk and portfolio volatility. |
| Money market funds | |
| These funds typically invest in short term securities such as commercial paper, certificates of deposit, Treasury bills and other highly liquid and stable securities. Money market funds typically have very low expense ratios and interest is generally credited to shareholders monthly. | These investors generally look for stable investments and may have a short-term time horizon and a lower tolerance for risk and portfolio volatility. |
Income/Bond funds are subject to interest rate risk and credit risk and may fluctuate as a result of interest rate changes or specific events related to the issuers of the debt securities. Market prices are subject to currency fluctuations or global economic, political or social events. Income/Bond funds tend to have smaller fluctuations in response to changing market conditions than Balanced or Equity funds.
| FUND TYPE | WHO SHOULD INVEST |
| OTHER FUND TYPES | |
| Target date funds | |
| These funds invest in different securities mixes as the "target" date approaches. Target date funds are designed primarily for retirement purposes. The investor chooses the fund based on when they plan to retire and the fund adjusts the mix of investments as the target date approaches. | These investors generally look for a systematic approach to investing. Because these funds are typically used for retirement, the volatility risk and time horizon will largely be based on the "target date". |
| Asset Allocation funds | |
| These funds invest in a diverse mix of investments. They attempt to reduce volatility risk through diversification. | These investors generally seek additional diversification through an asset allocation or portfolio approach. The volatility risk and time horizon will largely be based on the type of asset allocation fund chosen by the investor. |
Target date funds and Asset Allocation funds are subject to the same market risks and fluctuations as equity funds, balanced funds or income/bond funds depending on the percentage of equities and bonds that make up the fund. Such risks my include market risk, interest rate risk, credit risk and allocation risk. Funds with a higher percentage of equities will tend to have larger fluctuations in response to market conditions as opposed to funds with a higher percentage of bonds.
A Farmers Insurance and Financial Services Agent can assist you in developing a strategy that can help you toward your financial goals.
COST OF INVESTING
Like all investments, there is a cost associated with investing in a mutual fund. Fees and expenses will vary by investment company and by individual fund. The investment companies that manage the mutual funds provide many services to shareholders. Besides professional money management, they also provide administration services for the fund. Accounting, materials, statements, website services and customer service personnel all contribute to a well-operated mutual fund. The mutual fund charges a fee for these services. It is called a management fee and is typically a small percentage of the total assets of the fund. Shareholders will pay this fee proportionately based on the number of shares they own.
Another type of fee is a 12b-1 fee. This fee pays the broker dealer for assistance in servicing the shareholder accounts. Again, it is typically a small percentage of the total assets of the fund and shareholders pay this fee proportionately based on the value of their accounts.
Lastly, shareholders may pay sales charges for purchasing shares. This charge goes to the distributor and broker dealer and ultimately pays the registered representative for their services. Sales charges differ by fund and type of share the investor purchases.
Share Classes
There are a number of different types of shares an investor can purchase. The decision to purchase a specific share class will often depend on the individual investor's needs and objectives. The mutual fund will charge different fees and expenses depending upon the class of share you choose. Following are the three most common share classes and information on each.
| SHARE CLASS |
WHO SHOULD BUY |
| A Shares |
|
| A shares are sold with an up-front sales charge. The charge will decline as the amount invested increases. 12b-1 fees tend to be lower than with other share classes. Rights of accumulation may also be available to reduce sales changes | Investors with a long time horizon and/or large lump sum investment or multiple accounts may consider buying an A share. |
| B Shares | |
| B shares are sold without an up-front sales charge, but carry higher annual expenses for a fixed period (typically eight years). In addition, if shareholders sell shares during the first few years (typically six years), they may be subject to a redemption fee, known as a contingent deferred sales charge (CDSC), which declines over time. Once the CDSC is eliminated, Class B shares often "convert" into Class A shares. When they convert, they will begin to charge the same 12b-1 fees as A shares. | Investors with a long time horizon, small lump sum, generally below $50,000, or monthly investment may consider buying a B share. |
| C Shares |
|
| C shares are sold without an up-front sales charge, but carry higher annual expenses, usually for a fixed period. In addition, if shareholders sell C shares during the first year, they may be subject to CDSC. C shares generally do not convert into Class A shares. | Investors with a short time horizon may consider buying an C share. |
A Farmers Insurance and Financial Services Agent can help in developing a strategy for you that meets your individual goals and objectives.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so investors may lose money including lose of principal invested. Purchasers of mutual funds should consider investment objectives, risks, charges and expenses of the investments carefully before investing or purchasing. The prospectuses contain this and other important information. Please contact your Farmers Insurance and Financial Services Agent for prospectuses and read them carefully before purchasing such investments.
Past performance of any investment does not guarantee future results; investment returns will fluctuate so that an owner's shares, when redeemed, may be worth more or less than their original cost.
Variable Annuities
Variable Annuities not only offer protection in retirement, but potential appreciation while working toward that day. It's a long term investment product that allows your investment to grow in value in market-based investment options and offers you a guaranteed income stream when annuitized in retirement.
A variable annuity offers you:
- Investment options that fit your risk comfort level and adjustable to your needs and objectives as they change
- The benefit of potential tax deferred growth on account values (withdrawals or surrenders may be subject to tax and if under 59½ may include additional tax penalties)
- Optional Guaranteed Death Benefits and other riders (additional charges may apply)
Variable annuities are long term investments that offer the potential of market-based investment options to grow the account value with tax-deferred accumulation. The end result can be a nest egg with a guaranteed income you can depend on when annuitized.
Variable annuities are subject to insurance related charges and fees. The prospectuses contain this and other important information. The income payments are guaranteed by the insurance company, but subject to the claims paying ability of the insurance company.
Contact a Farmers Insurance and Financial Services Agent today to help you develop a strategy that meets your individual goals and objectives.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so investors may lose money including lose of principal invested. Purchasers of variable insurance contracts should consider investment objectives, risks, charges and expenses of the investments or the underlying investment options of the variable insurance contracts carefully before investing or purchasing. The prospectuses contain this and other important information. Please contact your Farmers Insurance and Financial Services Agent for prospectuses and read them carefully before selecting your investments or underlying insurance investment options.
Past performance of any investment does not guarantee future results; investment returns will fluctuate so that an owner's shares, when redeemed, may be worth more or less than their original cost. Performance of variable insurance contracts will also be affected by annual mortality and administrative expenses and is subject to a declining deferred surrender charge.
Withdrawals and/or other distributions of the taxable amounts, including death benefits, may be subject to ordinary income tax. If withdrawals and/or other distributions are taken prior to age 59½ a 10% federal tax penalty may apply. Please consult your tax preparer or CPA. A withdrawal charge also may apply. Withdrawals may reduce the value of the death benefit and any optional benefits.
Variable Universal Life
Variable Universal Life insurance offers the life protection with the ability to invest contract values in a variety of investment choices that fit your and your family's needs and objectives.
A Variable Universal Life policy offers you:
- Flexible coverage
- Investment options that fit your risk comfort level and adjustable to your needs and objectives as they change.
- The benefit of potential tax deferred growth on contract or cash values (withdrawals or surrenders of contract or cash values may be subject to tax)
Variable universal life insurance is subject to insurance related charges and fees. The prospectuses contain this and other important information.
Contact a Farmers Insurance and Financial Services Agent today to help you develop a strategy that meets your individual goals and objectives.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so investors may lose money including lose of principal invested. Purchasers of variable insurance contracts should consider investment objectives, risks, charges and expenses of the investments or the underlying investment options of the variable insurance contracts carefully before investing or purchasing. The prospectuses contain this and other important information. Please contact your Farmers Insurance and Financial Services Agent for prospectuses and read them carefully before selecting your investments or underlying insurance investment options.
Past performance of any investment does not guarantee future results; investment returns will fluctuate so that an owner's shares, when redeemed, may be worth more or less than their original cost. Performance of variable insurance contracts will also be affected by annual mortality and administrative expenses and is subject to a declining deferred surrender charge.
Partial withdrawals are at net asset value and may be more or less that the original amount. Withdrawals may be taxable and may reduce the value of the death benefit. Upon surrender, a taxable gain may be recognized. Please consult your tax preparer or CPA.
Source: Farmers Insurance Group