FBL Financial Group, Inc. primarily sells individual life insurance and annuity products through its subsidiary, Farm Bureau Life Insurance Company (Farm Bureau Life), principally under the consumer brand name Farm Bureau Financial Services.
In the state of Colorado, the company offers life and annuity products through Greenfields Life Insurance Company (Greenfields). As of December 31, 2020, these distribution channels consisted of 1,614 exclusive agents and agency managers, who sell the compa...
FBL Financial Group, Inc. primarily sells individual life insurance and annuity products through its subsidiary, Farm Bureau Life Insurance Company (Farm Bureau Life), principally under the consumer brand name Farm Bureau Financial Services.
In the state of Colorado, the company offers life and annuity products through Greenfields Life Insurance Company (Greenfields). As of December 31, 2020, these distribution channels consisted of 1,614 exclusive agents and agency managers, who sell the company’s products in the Midwestern and Western sections of the United States.
Segments
The company operates through Annuity, Life Insurance, and Corporate and Other segments.
Annuity segment
This segment sells various traditional annuity products through the company’s exclusive agency force. This segment primarily consists of fixed rate and indexed annuities and supplementary contracts (some of which involve life contingencies). Traditional annuities provide for tax-deferred savings and supplementary contracts provide for the systematic repayment of funds that accumulate interest.
Fixed Rate Annuities
The company offers annuities that are marketed to individuals in anticipation of retirement. It offers traditional annuities in the form of flexible premium deferred annuities (FPDA) that allow policyholders to make contributions over periods. For traditional annuity products, policyholder account balances are credited interest at rates that the company determines subject to a guaranteed minimum. The annuitant might elect to take the proceeds of the annuity either in a single payment or in a series of payments for life, for a fixed number of years, for a fixed amount, or a combination of these options.
In addition to FPDAs, the company markets single premium deferred annuities (SPDA) and single premium immediate annuity (SPIA) products, which feature a single premium paid when the contract is issued. Benefit payments and the surrender charge structure on SPDA contracts are similar to other fixed rate annuities. Benefit payments on SPIAs begin immediately after the issuance of the contract. The company invests the premiums it receives from fixed rate annuities. The assets reside in its general account.
Indexed Annuities
With an indexed annuity, the policyholder might choose from a traditional fixed rate strategy or an indexed strategy, with the underlying index being the S&P 500. The product requires crediting of interest and a reset of the index annually. The computation of the index credit is based upon either a point-to-point calculation (the gain in the index from the beginning of the contract year to the next reset date) or a monthly averaging of the index during the period, subject to a cap. This product allows contract holders to re-allocate funds among the indexed accounts and a traditional fixed rate strategy at the end of each reset period. It includes a guaranteed lifetime withdrawal benefit rider. If activated by the policyholder, the rider provides a minimum amount that is available for withdrawal at specified withdrawal rates even if the accumulated value goes to zero. There is an additional annual charge for the activated rider. Indexed annuity premiums are invested in the company’s general account similar to fixed rate annuities. A portion of the investments are used to purchase one-year call options on the S&P 500 to fund the index credits on the accounts. New call options are purchased at each reset date.
Life Insurance Segment
This segment sells various traditional and universal life insurance products through the company’s exclusive agency force. The Life Insurance segment consists of whole life, term life and universal life policies. These policies provide benefits upon the death of the insured and might also allow the customer to build cash value on a tax-deferred basis.
Traditional Life Insurance
The company offers whole life insurance, which provides benefits for the life of the insured. Whole life insurance provides level premiums and a level death benefit and requires payments in excess of mortality costs in early years to offset increasing mortality costs in later years. The company offers a non-participating whole life insurance product. Prior to May 2019, the company offered participating whole life insurance. Under the terms of the participating whole life policies, policyholders have a right to participate in the overall performance of the participating life block to the extent determined by Farm Bureau Life, through annual dividends.
The company also markets nonparticipating term insurance policies that provide life insurance protection for a specified period. Term insurance is mortality based and has no cash value. However, the company also offers a return of premium term product, which returns a percentage of premiums after a set number of years. In addition to its level face amount term products the company offers an increasing face amount term product. The company’s increasing term life insurance product allows for scheduled increases of 20% of the initial face amount on the first five anniversaries.
Universal Life Insurance
The company’s universal life policies provide permanent life insurance protection which allows the customer to pre-fund future insurance costs and accumulate savings on a tax-deferred basis. Premiums received, less policy assessments for administration expenses and mortality costs, are credited to the policyholder’s account balance.
The company’s indexed universal life insurance product provides life insurance protection with flexible premium payments and provides a death benefit with cash accumulation. The premium is paid into a holding account and once it is fully funded with a year’s worth of policy charges, the excess value is transferred into an indexed segment or a fixed account, according to the selected allocation.
Corporate and Other segment
This segment includes wealth management services; advisory services for the management of investments for other companies; a management fee for managing the affiliated property-casualty companies; marketing and distribution services for the sale of mutual funds and insurance products not issued by the company; leasing services with affiliates; and closed blocks of variable annuity, variable life and accident and health products.
Strategy
The company’s strategy includes investing in a wealth management strategy which allows it to offer an open architecture mutual fund platform, a fee based investment management platform and financial planning. The company intends to continue to add Farm Bureau wealth management advisors who fit its culture and service orientation.
Market Area
Sales through the company’s distribution channels are conducted in 15 states, which it characterizes as multi-line states (the company owns the Farm Bureau affiliated life company and manage the Farm Bureau affiliated property-casualty companies) - Arizona, Iowa, Kansas, Minnesota, Nebraska, New Mexico, South Dakota and Utah; and life partner states (the company owns the Farm Bureau affiliated life company but non-owned/non-managed Farm Bureau affiliated property-casualty companies manage the exclusive multi-line agents) - Colorado, Idaho, Montana, North Dakota, Oklahoma, Wisconsin and Wyoming.
The company’s target market is Farm Bureau members and ‘Middle America’. The company traditionally has presence rural and small town markets and also in small and mid-metro markets.
Discontinued Operations
In 2020, the company discontinued new sales of a universal life with secondary guarantee product that provided life insurance protection with flexible premium payments and fully guaranteed interest, cost of insurance charges and other expenses.
History
FBL Financial Group, Inc. was founded in 1945. The company was incorporated in Iowa in 1993.
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