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ByMaggie Overholt Contributor

Maggie is a former senior content strategist at Reviews. She’s covered everything from smart hubs and stand mixers to home insurance and mortgages.

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. On top of that, State Farm offers a good selection of policy add-ons, so its policies are fairly customizable.

And while State Farm also carries multiple options for whole life insurance, it’s worth noting that it isn’t our top pick for whole life — in large part because it has fewer “living benefits” than other providers like Northwestern Mutual and New York Life. These benefits often become more important as the insured grows older, as they can be used to cover medical treatments and other end-of-life costs.

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: The company has been rated No. 1 for customer satisfaction five years running, and it has rock-solid financial backing.

The Claim

State Farm’s new slogan is “Here to help life go right.” But what does that mean, exactly? For State Farm, it’s a promise to be there for customers at all times — not just when something goes wrong. Customers are assured a great experience and sound insurance, says State Farm, thanks to superior customer satisfaction and financial strength ratings.

Is it true?

Yes.

We put a lot of stock in customer experience and financial strength, as those are the biggest indicators of what it’s actually like to work with a provider. In that sense, State Farm’s ratings are its biggest selling point. State Farm is No. 1 for customer service in J.D. Power’s rankings, with respondents ranking the company five out of five in every category, from price to policy to service. Coupled with top financial strength scores from the independent agencies A.M. Best, S&P Global, and Moody’s, State Farm a solid bet for most insurance customers. Policyholders should expect strong customer support and smooth sign-on and policy management — and if that policy is ever needed, there’s no question that State Farm will be able to pay out.

Of course, State Farm wouldn’t have gained this status without having strong insurance offerings in the first place. After doing a deep dive into State Farm’s policy options, we’re impressed with the variety of life insurance it carries. Beyond providing term, whole, and universal life options, State Farm lets customers choose from a diverse list of payment structures; that way, most people can find the right size policy at a price point they’re comfortable paying for.

Product Overview

Best for

People who value customizability in policies and payment plans

Not for

People with long-term whole life needs

Features

Price Varies
Available types of life insurance Term, Whole, Universal Life
Standout features Guaranteed renewability*
Guaranteed level premiums*
Flexible payment plans for universal life insurance
Term-to-Permanent policy conversion options
Critical Illness rider
Term lengths 10, 20, or 30 years
Financial strength ratings A.M. Best: A++
S&P Global: AA
Moody’s: Aa1
J.D. Power 2018 U.S. Life Insurance Study score 825/1,000
"Among the best"
Customer resources 24/7 phone line for policy updates/ management and claims
FAQ
Online life insurance calculator
Mobile app for account management
Helpful claims process checklist

*With Term Life policies

Best-in-class for customer satisfaction

State Farm is currently enjoying its fifth year running as J.D. Power’s top-rated life insurance company. The J.D. Power study, which surveyed over 5,000 customers in 2018, ranks life insurance providers based on their price, service, policy offerings, and billing process. State Farm has the happiest customers across the board; it’s rated five out of five in every category.

Industry-leading financial ratings

Along with great customer ratings, State Farm earns just about the highest financial strength scores a company can receive: A++ from A.M. Best, AA from S&P Global, and Aa1 from Moody’s. For policyholders, that means total peace of mind about their financial security. State Farm will be able to make good on its obligations, whether you need to file a claim one year from now or 50. This stability is especially important for life insurance, as it will usually be decades down the road before a policy is needed.

Multiple distinct term life options

State Farm has some of the best term life insurance on the market, and not just because of its excellent ratings. The company’s range of policy options is impressive — it offers three types of term life insurance on its site, whereas most companies only have one or two. The right one for you will depend on your financial goals and coverage needs.

  • Select Term Life Insurance is the most affordable and flexible option. It provides coverage for 10, 20, or 30 years at a low cost and expires once the term is up.
  • Return of Premium Life Insurance is pricier than Select Term (about three times as much), but with a distinct benefit: If you outlive the term, all the premiums you’ve paid will be returned to you. Return of Premium Insurance can last 20 or 30 years.
  • Instant Answer Term is State Farm’s response to no-medical-exam life insurance. It allows you to skip the initial health evaluation and select a flat $50,000 of coverage, lasting until age 50 or for 10 years, whichever is later. Consider this coverage with care. No-exam insurance tends to be pricier than traditional term, because providers are unable to assess risk and need to compensate for potential payouts.

Protection for as long as you need it

We also appreciate State Farm’s generous extension options for term life. If you realize down the road that you need more insurance than the term you signed on for, the company will let you renew your policy through age 95 “regardless of health, subject to age limits.” It will also allow you to convert to a whole life policy through age 75 — again, without a second health exam. That “regardless of health” qualifier is important: It means you won’t be refused coverage or upcharged if you’ve developed a serious illness during your term.

Mobile policy management

State Farm stands out from the competition with its mobile app. The app allows you to view your policy details, manage coverage, pay bills, and check the company’s FAQ on the go. While having an app seems commonplace, most life insurance companies haven’t made the move to mobile yet. Most people are accustomed to managing their accounts and finance anywhere at any time — we appreciate State Farm for keeping up with the trends.

A variety of whole life payment structures

In terms of flexibility, we like that State Farm offers multiple payment plans for whole life insurance. Since whole life is the most expensive option by far (up to 10 times the price of term life), it’s important to be able to choose a payment schedule you’re comfortable with. Here's what those different options look like:

  • Traditional whole life insurance has the most affordable premiums of the lot — starting at over $75 per month for a 25-year-old in excellent health — and requires regular payments for your whole life. The longer you pay in, the greater your policy’s cash value.
  • Limited Pay Life allows you to choose the length of time during which you pay premiums on your policy. A 10-year plan carries steep premiums, starting at over $332 per month, but choosing a 15- or 20-year plan lowers premiums significantly — meaning you could pay less per month for a longer window. After that, your policy’s cash value grows slowly with interest.
  • Single Premium Life lets you pay a large, one-time lump sum — starting at $20,000 — for a guaranteed $100,000 death benefit. The down payment is huge, but it will accrue interest much more quickly than the slow-growing cash value of traditional whole life.

Possible drawbacks

Rigid term lengths

The biggest limit to State Farm’s flexibility is that it only offers 10-, 20-, and 30-year terms. We prefer companies that give policyholders more agency in choosing their term length — that way, no one gets stuck skimping on coverage or paying for more than they need. New York Life, for example, lets customers choose any term length between 10 and 20 years. That said, experts attest that 20 years is the most popular term length; if you’re among the majority of policyholders that wants to start with a 20-year term, then State Farm has you covered.

Lacks one of the most important riders

It’s important to note that State Farm has a decent rider selection, on par with other top companies like New York Life and MetLife. However, State Farm is missing an Accidental Death Benefit rider, which many of our experts agree is the most important option. ADB allows you to use a portion of the death benefit for end-of-life costs, including medical treatments and care. Our other favorite life insurance companies all offer it, and we’re disappointed by the omission from State Farm.

Still, State Farm does offer alternate channels for accessing the death benefit during one’s lifetime. The Critical Illness rider, for example, will provide a lump sum payment at the time of diagnosis, and the Disability Income rider can help supplement income if the policyholder becomes injured and unable to work. These riders may be a good alternative to ADB. However, if you’re concerned about having greater living benefits, you may consider checking out a company like New York Life; its accelerated benefit allows you to use up to $250,000 of the policy’s value during your lifetime.

Moderate online resources

As far as customer resources go, State Farm is middle of the line. Its FAQ is barebones, covering the basic types of insurance and what you’ll need to know to sign up.

State Farm’s one unique tool is this checklist of things you’ll need to file a life insurance claim. Life insurance claims are a tough subject to approach, and most providers avoid the topic online entirely, so we appreciate State Farm’s helpful, straightforward information. But beyond that, its resources aren’t especially helpful. If you have in-depth questions about building a policy or selecting the right coverage, you’ll likely have to reach out to an agent.

Can be pricey

State Farm is likely not your cheapest life insurance option. When we compared term quotes for a variety of profiles, State Farm had the highest premiums across the board (compared to Protective Life, Pacific Life, Principal Financial, Mutual of Omaha, and New York Life). The company has also been knocked by a few independent insurance agents for overpricing its life policies.

“I find that while State Farm is good for auto and home, their life insurance tends to be expensive. Their underwriting is also very challenging if you have health issues or use marijuana.”

However, underwriting challenges and price comparisons for life insurance should be taken with a grain of salt. It’s important to remember that life insurance prices are set by the company’s underwriting process, which evaluates how “risky” it is to insure you. A company’s perceived “risk factors,” and by extension your quote, will look a little different with every company — meaning State Farm could end up being the most affordable provider for one customer and the most expensive for another. That’s why it’s important to compare quotes from more than one company before committing to a policy. With its robust policies, reliable service, and strong financials, State Farm should be one of the candidates on your list.

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The Competition

  State Farm TIAA Life New York Life Northwestern Mutual
Our review Our review Our review
A.M. Best financial strength rating
A++ A++ A++ A++
J.D. Power 2018 U.S. Life Insurance Study score
5/5 N/A 4/5 4/5
Policy options
Term, whole, universal Term, whole, universal Term, whole, universal Term, whole, universal
No-exam insurance option
Get a quote Get a quote Get a quote Get a quote

State Farm vs. TIAA Life

If your main priority is finding the lowest premium, we recommend starting your search with TIAA Life. TIAA has many of the same benefits as State Farm, including guaranteed renewability and the ability to convert to a permanent policy at any point in the original term. But when we reviewed the best cheap life insurance companies, it quoted us cheaper premiums for every sample profile.

“State Farm is great when it comes to Auto and Homeowners insurance, but they just can't compete in the life insurance space. State Farms prices are usually 30-50% higher than other A-rated competitive carriers. They also have strict underwriting, so if you have any health issues, talk to an independent agent that has more options for your specific profile.”

That said, you may make small sacrifices for affordability. TIAA has fewer riders than many other companies, including State Farm. It’s lacking some living benefits like Disability, Critical Illness, and Long-Term Care riders. This means its policies are less helpful in the event that your financial needs change down the road. Those with shorter terms or limited coverage needs may not mind, but if you want extended financial security, you may be better off with State Farm.

State Farm vs. New York Life

New York Life has State Farm beat for term flexibility. Customers can choose any term length between 10 and 20 years, as opposed to State Farm’s 10-year increments. That gives you the freedom to choose the exact amount of coverage you require without paying for any years you don’t. You could, for example, choose to pay for exactly 18 years of insurance to cover the period while your kids live at home.

However, New York Life is a little less amenable when it comes to policy conversion. If you decide to convert to a permanent policy any time after the first 10 years, you’ll have to purchase a separate rider to do so. With State Farm, conversion is guaranteed through age 75 — no additional purchase required. That means you’ll want to be fairly sure about sticking to your selected term length before signing up with New York Life.

State Farm vs. Northwestern Mutual

State Farm missed one of our main benchmarks for whole life insurance: It doesn’t offer great “living benefits.” These riders often become more important as you grow older, as they allow your policy to cover medical treatments, long-term care, and assisted living costs. The best whole life policies should offer plenty of these extra protections. They can be a huge help if your health or other circumstances change 30, 50, or 70 years down the road.

Northwestern Mutual excels in that department with plenty of good “living benefits,” like an Accelerated Death Benefit, a Long-Term Care rider, and a Disability Income Rider. Since your whole life policy will be with you for decades, we appreciate that Northwestern Mutual has the coverage to adapt to your changing life.

State Farm Life Insurance FAQ

Why did State Farm change its motto?

In 2017, State Farm replaced its signature jingle, “Like a good neighbor, State Farm is there,” with a new tune. The company now promises that it’s “here to help life go right” — part of a proactive, customer-focused strategy that the company is implementing. According to the World Advertising Research Center (WARC), State Farm is looking at a more holistic approach to the customer. It hopes to educate policyholders, promote their financial well-being, and improve their lives in general. This includes outreach strategies like connecting people with volunteer opportunities and opening a coffee shop in Chicago that holds money management courses.

Can I borrow money from my State Farm life insurance policy?

Yes, but you can only borrow against a permanent or whole life insurance policy. When shopping around for a policy, a State Farm agent will be able to go into greater detail regarding the specifics.

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.

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