Based in Bloomington, Illinois, State Farm was founded in 1922 and initially only offered automobile insurance.
It has since grown to provide various insurance products and services from offices around the country.
State Farm has over 19,000 representatives ready to help you find the life insurance policy that best suits your needs.
In this review:
State Farm Life Insurance Ratings
According to the National Association of Insurance Commissioners, both State Farm Life and Accident Assurance and State Farm Life Insurance Company received fewer than average complaints compared to other insurance companies.
State Farm also received the highest customer satisfaction award from J.D. Power, beating other life insurance companies such as Nationwide in a study that included pricing, policies, and overall customer satisfaction.
AM Best gave State Farm an A++ Financial Strength Rating, while the Better Business Bureau ranked it at an A-.
This indicates that the company is financially stable and will continue to be stable in the foreseeable future. It also increases the likelihood that State Farm will honor your policy and consistently pay dividends for participating policies.
Life Insurance Products
State Farm has various life insurance options, making it easy to find a plan that fits your budget and needs. These policies are categorized as term life insurance, whole life insurance, and universal life insurance.
State Farm Term Life Insurance
Term life insurance policies are cost-effective and give you protection for a limited amount of time, making them easy to budget. When you purchase term life insurance, you can choose between these options:
- Select term insurance lasts for 10, 20, or 30 years with coverage that starts at $100,000. It provides affordable death benefit coverage for a specific length of time with level payments. You can extend your coverage until the age of 95 or include riders such as spousal and child coverage. But these features come at an additional cost.
- Return of premium term insurance has level premium payments over a term of 20 or 30 years. But you are eligible to receive all of the premiums you paid at the end of the term if you have not used the death benefit. It is more expensive but also builds cash value against which you can borrow.
- Instant answer term insurance is available to individuals between the ages of 16 and 45 without a medical exam. Although the application still includes basic health questions. The policy provides up to $50,000 in death benefits until the policyholder turns 50 or for a length of 10 years, whichever occurs later.
State Farm Whole Life Insurance
Rather than lasting for a set amount of time, whole life insurance provides coverage for the rest of your life. This option is significantly more expensive than term life insurance.
However, it accumulates cash value that you can invest or access through loans. State Farm’s whole life insurance policies are as follows:
- Whole life insurance gives guaranteed lifetime coverage while ensuring that your monthly premiums stay the same. Its minimum face value amount is $100,000, and your premiums are split between insurance coverage and tax-deferred savings.
- Single premium whole life insurance provides the same coverage. But instead of paying a monthly premium, you fully fund the policy with one large payment at the start. It also has guaranteed cash value and is eligible for dividends. And State Farm has consistently paid these dividends, despite not being guaranteed.
- Limited pay whole life insurance lies between the previous two policies. It requires slightly more expensive premiums in pay terms of 10, 15, or 20 years before keeping the coverage for life. As a modified endowment contract, this policy may have tax implications.
- Final expense insurance provides a death benefit fixed at $10,000 meant to cover burial expenses. It is available to customers between the ages of 50 and 85 with level premiums up to 100 years old.
State Farm Universal Life Insurance
State Farm’s universal life insurance policies give you lifetime protection with adjustable and inexpensive premiums. They are flexible and allow you to make changes to policies to fit your financial needs. The three universal life insurance options State Farm offers include the following:
- Universal life insurance provides initial coverage up to $50,000 for anyone up to 85 years old. Although the coverage differs depending on age range. You can choose between a level death benefit that equals a set amount or a variable death benefit that changes based on your account’s value.
- Joint universal life insurance covers two people on the same policy as a cost-efficient and simple insurance solution. Starting at $100,000, this coverage is for individuals between the ages of 18 and 85. And, accumulates accessible cash value like other permanent life insurance policies.
- Survivorship universal life insurance also covers two people on the same policy. But it only pays out after both individuals have died. It is less expensive than two separate policies, and money paid for the policy is split between the premium and a federal tax-deferred cash account. You can access the cash account as needed, but loans will reduce the policy’s guaranteed death benefit until they are paid back and will accrue interest.
State Farm has no variable universal life insurance policy or indexed options, unlike many other life insurance companies.
State Farm Life Insurance Riders
These amendments to your insurance policy let you customize your coverage by paying for additional options such as including other individuals. State Farm’s comprehensive list of riders consists of these choices:
- Children’s term
- Flexible care benefit
- Payor insurance
- Guaranteed insurability option
- Level term
- Estate preservation
- Disability premium waiver
- Accidental death
Eligibility and Application Process
Policy eligibility is mostly the same for State Farm as it is for other life insurance companies. Policies require a specific age range for different coverage levels, and your eligibility and premium pricing depend on your health conditions.
For example, pricing is more expensive for smokers, even more so than other life insurance companies.
In addition to using standard health ratings, State Farm can give you a “super preferred” health rating for excellent quotes.
However, it is difficult to obtain as you need to be in almost perfect health. You can also apply for instant answer term insurance without a medical exam, but it is subject to other restrictions such as age requirements.
The application process takes place through a local agent that will be your representative for all policy matters.
State Farm Life Insurance Pros & Cons
When deciding if State Farm is the right insurance provider for you, consider these factors.
Pros
As one of the largest life insurance companies, State Farm promises financial stability and has a national team of agents to give you personalized assistance.
Its plentiful resources give this company an excellent reputation for its customer service.
State Farm also has an impressive list of policy choices. If you choose term insurance, it is easy to extend your coverage to a lifelong policy.
You can even apply for final expense insurance without a medical exam.
Cons
The most obvious drawback is that State Farm is not available in Massachusetts. In New York and Washington, State Farm Life Accident Assurance Company handles all policies, while State Farm Life Insurance Company covers the remaining states.
State Farm is also not the best choice if you prefer cheaper rates over proven customer service and financial stability.
Achieving a super preferred health rating will give you access to the best quotes. But it is almost impossible to attain.
You can apply for final expense insurance without a medical test, but it has age and benefit restrictions. Final expense policies are capped at $10,000, which is slightly higher than the median cost of a funeral. But they do not include expenses such as cemetery or tombstone costs.
Some of State Farm’s policies lack tools for online quotes as well. You will usually have to call a local agent for a quote, but most other major life insurance companies also operate this way.
