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State Farm Review

State Farm life insurance ranks as one of the best life insurance companies in the industry by offering a wide selection of coverage options and diverse policy riders. Though their products are not the cheapest, their flexible policy options provide enhanced value for many customers. Get Quotes

Fletcher Wilson

Fletcher Wilson

Life Insurance Expert

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Updated: March 19, 2014

The Good

Comprehensive suite of coverage options:

State Farm life insurance offers a number of different term, life, and universal coverages that can be tailored to fit any individual need. Flexible policy options like term conversion, cash surrender, and survivorship ensure that State Farm's permanent policies evolve with the changing needs of their policyholders. The availability of a 20- or 30-year return of premium policy with flexible coverage minimums provides additional choices and makes obtaining an insurance policy much more approachable for younger buyers.

Numerous policy riders:

State Farm life insurance riders give policyholders a means to tailor their standard coverage to their individual needs. The company offers the most complete set of riders in the industry, making their term, whole, and universal policies very flexible. Available policy riders include coverage for everything from disability income to long-term care, accidental death benefits, and funeral expenses.

Solid online tools and learning materials:

State Farm is clearly dedicated to educating its customers, providing all the information you need to make a confident policy decision. If you're new to life insurance and need to learn the basics, you can find some excellent beginner guides to get you going. For more advanced study, the State Farm Learning Center offers a range of articles touching on all the important questions you need to answer when considering your policy options. Once you have the basics down, State Farm's Life Illustrated Calculator helps you estimate the amount of insurance you need based on the details of your lifestyle, current finances, and future obligations. You also have access to one of the best online quote tools in the industry, which offers quotations for a variety of life insurance products, not just term life insurance like many of the tools offered by competitors. After completing a quote, you can send the details directly to a local State Farm agent for a professional review.

Strong customer support and payment flexibility:

With around-the-clock telephone support for both claims and payment services, you're always able to get in touch with a State Farm representative. You can also contact customer support directly via email, Facebook or Twitter. When it comes time to pay your premium, you pay your full premium in advance or spread it out over two, four, or 12 installments. To submit a payment, use the State Farm Pocket Agent app, log in to your account online, or call in to payment services. You can even walk into your local State Farm agency.

The Bad

Moderate fees and charges:

Though State Farm's fees and charges are not outrageous, they're not especially favorable either. The company assesses a daily mortality and expense risk charge that amounts to an annual rate of 0.8% of net assets, roughly standard for the industry. In most cases, early cancellation of your policy induces surrender charges, which amount to 9% on the cash value of your account for cancellation in the first year, falling 1% each year thereafter. Though State Farm life insurance does offer commission-free policies, if you're a price-conscious shopper looking to minimize your ongoing costs, you may want to shop around for a better deal.

The Details

Details
A.M. Best FSR Rating A+
A.M. Best ICR Rating aa
Moody's Rating Aa1
Policy Offerings Term, Whole, Universal
Standard & Poor's Rating AA

Features

Financial Strength

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  • A.M. Best "Excellent" or Better - The insurance company has an A.M. Best rating of "A-" or better.
  • ICR Rating "Stable" - The insurance company has an A.M. Best Credit Rating of "Stable" or better.
  • Moody's "Very Strong" - The insurance company has a Moody's rating of "Aa3" or better.
  • S&P Rated "Very Strong" - The insurance company has an S&P rating of "AA-" or better.

Policy Features

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Policy Riders

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Coverage Options

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Customer Support

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Contract Provisions

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Online Tools and Materials

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Payment Options

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