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State Farm Life Insurance Review
State Farm is one of our favorite providers for term life insurance thanks to its diverse offerings. Customers can choose from three different term structures depending on their needs: a standard term policy, an “instant” no-exam policy, and a “return of premium” plan that refunds your premium payments if you outlive the policy. In addition to its term policies, State Farm offers whole and universal life insurance. It has a good selection of policy add-ons, too, so its policies are fairly customizable.
Keep in mind that there isn’t a single best policy or provider for everyone. The right company for you will depend on who extends the best premium for the coverage you need. We suggest requesting a quote from State Farm along with a few other companies to see how your options stack up. If you do choose State Farm, you’ll be well taken care of: It has consistently earned high marks for customer satisfaction, and it has rock-solid financial backing.
The Life Insurance Factors We Analyzed
State Farm consistently rates well for customer satisfaction, earning a perfect five out of five score from J.D. Power. J.D. Power measures customer satisfaction with the policy application process, agent communication and interaction, and how difficult it is to get a quote online, among other things. State Farm excels in almost all of these areas, falling short only in the “application and orientation” category. A slow or difficult application can certainly make acquiring a policy more frustrating, but it’s worth noting that State Farm still holds a second-place ranking among 24 eligible individual insurance providers in the U.S. for overall satisfaction.
On top of that, State Farm received fewer than the average number of complaints in 2018, according to the National Association of Insurance Commissioners — pretty impressive when you take into account State Farm’s 7.8 million active life insurance policies.
Coverage and rider information
Within State Farm’s term, whole, and universal life insurance structured offerings are a number of unique coverage options designed to fit your specific needs perfectly. We particularly like State Farm for its term insurance options, which include:
- Select Term: the most basic coverage option, equipped with term lengths of 10, 20, or 30 years and a minimum of $100,000 in coverage
- Return of Premium: similar to Select Term coverage, though only available in 20- or 30-year terms with minimum coverage of $250,000 or more. This coverage option is more expensive, but it returns all premiums you’ve paid if you outlive the term.
- Instant Answer: a smaller policy meant to cover any final expenses after the policyholder’s death. It allows you to skip the initial health evaluation for a flat $50,000 of coverage, and term limits top out at 10 years or when the policyholder turns 50, whichever is longer.
State Farm also offers multiple payment plans for whole life insurance. In addition to traditional whole life, State Farm offers Limited Pay Life (which allows you to choose the length of time during which you pay premiums on your policy) and Single Premium Life (which allows you to pay a large one-time lump sum for a guaranteed $100,000 death benefit). Its universal life insurance has similar benefits, with coverage starting at just $25,000 and flexible payment structures. With universal life, if a user wants to adjust their monthly premium payment amount up or down from one payment period to the next, they can do so as long as they stay above their predetermined minimum monthly premium level.
Universal life policies are also unique in that they feature joint or survivorship policies, which provide protection for up to two people and are cheaper than purchasing two separate life insurance policies. A joint policy pays out the face value of the coverage when the first of the two policyholders dies, while a survivorship policy releases the payout after the second death.
Should you decide that you want to convert your policy from a term life plan to a permanent policy, State Farm allows you to do so fairly easily prior to age 75. A policy conversion also comes with the added benefit of a reduction in your premium for the first year of your new policy, as long as you haven’t had a term life plan with State Farm for more than five years.
While State Farm has a decent rider selection, on par with other top companies like New York Life and MetLife, it’s important to note that it’s missing an Accidental Death Benefit rider — a rider which many of our experts agree is the most important option. ABD allows you to use a portion of the death benefit for end-of-life costs, including medical treatments and care. State Farm does offer alternate channels for accessing the death benefit during one’s lifetime, like the Critical Illness rider, but we’re still disappointed by the exclusion.
Life insurance coverage features
State Farm Life Insurance Overview: Financial Strength, Availability, and History
- In business since: 1922
- S&P Global financial strength rating: AA
- Moody’s financial strength rating: Aa1
- A.M. Best financial strength rating: A++
- States served: 49 (not available in Massachusetts)
All information accurate as of January 6, 2020.
The Bottom Line
We recommend State Farm for all varieties of life insurance, thanks to its stellar customer satisfaction and financial strength scores. We’re confident that the company will be easy to work with and keep you in good hands financially. Just remember: Price always varies by company, so it’s important to shop around and find your best offer before settling on a provider. We suggest comparing your quote from State Farm with a few of the other best life insurance providers to see which is the right fit for you.
State Farm Life Insurance FAQ
With an AA from S&P Global, an Aa1 from Moody’s, and an A++ from A.M. Best, State Farm boasts some of the strongest financial health metrics of any provider in the industry. It also boasts a score of five out of five from J.D. Power for customer satisfaction. This, combined with State Farm’s customizable policies and payment plans, makes it a strong contender among life insurance providers.
State Farm offers term, whole, and universal life insurance, though within those three categories it provides a variety of specialized policies designed around different payment structures and needs.
The cost of life insurance is predicated on a number of factors, including the policyholder’s age, health, and life expectancy. In addition to this, the type of policy, the length of the term, and the death benefit amount all affect your total premium. To get a better idea about what a life insurance policy might cost you per month with State Farm, reach out to an agent for a quote.
Yes. State Farm’s whole life insurance is a participating policy, which means it is eligible for dividend payments. Any excess money earned by State Farm from whole life account investments can be distributed through a dividend to owners of these policies. Policyholders have the option of receiving dividend payments as a deduction from their premiums or in cash as an increase to their death benefit. Though dividends are not guaranteed, State Farm has paid them consistently throughout its history.
Depending on the type of policy you’d like to purchase, it’s likely that you’ll have to fill out a medical questionnaire or take a medical exam in order for State Farm to assess your health and assign an appropriate premium. Users interested in a State Farm policy that doesn’t require a medical exam should look into its Instant Answer term life policy, which offers a flat $50,000 in coverage for 10 years or until the insured reaches age 50, whichever is longer.
Yes. You are free to cancel your State Farm Life Insurance policy whenever you want, but you should reach out to an agent first — the terms of your policy may require you to surrender part of your cash value. To cancel your policy, you can contact an agent by phone, by mail, or in person at a State Farm office.