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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
Customer experience
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)
The Competition
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
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