If you’re shopping for a life insurance policy, State Farm deserves a close look. State Farm offers a diverse range of life insurance products, including term, whole, and universal policies, and even a no-exam option for those looking for quick policy issuance.
- Pros and Cons
- Key Takeaways
- Company Overview
There is a wide range of life insurance options
You can convert your term policy to permanent coverage
No-exam insurance is available
You may not be able to get a quote online for all products
Final expense policies are capped at $10,000
No-exam plans have age and benefit restrictions
- There are over 19,000 State Farm agents nationwide, so you can easily get personalized assistance
- If you have a State Farm term life insurance policy, you can convert it to permanent coverage regardless of your health status, giving you lifetime coverage
- Return of premium term life insurance is available; if your policy’s death benefit isn’t paid out within the initial 20- or 30-year term, you’ll get your money back at the end of the term
- If you live in Massachusetts, State Farm is not licensed in your state, so you’ll have to find another insurer
State Farm was founded in 1922 and originally offered only automobile insurance. Since then, State Farm has grown a great deal and now has over 100 products and services, including insurance, banking, and investment accounts.
The company has over 19,000 agents nationwide and services over 83 million policies throughout the country. State Farm is headquartered in Bloomington, Illinois.
- Year Founded 1922
- Kinds of Plans Whole, term, universal
- Number of Plans 10
- Payment Plan Options Monthly, annual, one-time
- Customer Service 800-782-8332
- Official Website www.statefarm.com/insurance/life
Please note that not all life insurance companies are currently accepting insurance applications due to the COVID-19 pandemic.
- There is a wide range of life insurance options: With State Farm, you can choose between whole life, term life, and universal life policies. There are different coverage options and riders you can add, so you can customize your policy to meet your needs.
- You can convert your term life policy to permanent coverage: If you have a term life policy with State Farm, you can convert it to permanent coverage, regardless of your health status.
- No-exam insurance is available: If you don’t want to go through a medical exam—a typical requirement for most life insurance policies—State Farm’s Instant Answer Term Insurance allows you to get $50,000 in coverage without an exam.
- You may not be able to get a quote online for all products: While State Farm does allow you to get quotes online for some life insurance policies, that feature isn’t available for all products in all states. Depending on where you live and what policy you are interested in, you may need to call an agent to get a quote.
- Final expense policies are capped at $10,000: State Farm’s final expense policies—which are intended to cover burial costs—are capped at $10,000. According to current data from the National Funeral Directors Association, the median cost of a funeral with viewing and burial is $9,135, but that doesn’t include expenses like cemetery, tombstone or marker costs, and flowers, which can add to the overall expense. A typical burial and memorial ceremony can quickly surpass the $10,000 maximum that State Farm offers.
- No-exam plans have age and benefit restrictions While no-exam policies are available, only people between the ages of 16 and 45 are eligible, and the benefits are capped at $50,000. If you need more coverage, you’ll need to apply for a different policy and undergo a medical exam.
Whether you want a relatively inexpensive policy that just covers your final expenses or you want to ensure your family’s future is protected when you’re gone, State Farm has a range of life insurance options available. With 10 different life insurance plans to choose from, you can find a policy that meets your needs.
In 2019, State Farm wrote over $4.7 billion in direct life insurance premiums.
Term Life Insurance
With term life insurance, you get death protection for a fixed period of time.
Term life policies can be a cost-effective option for most families. They’re especially popular for people with young children since term life gives you a safety net or can be used to pay off the home mortgage if you pass away.
State Farm has three different term life insurance products:
- Select Term: With Select Term Life Insurance, you can choose a 10-year, 20-year, or 30-year term. Coverage starts at $100,000, and your premium is level, meaning you won’t be surprised by increases. You can extend your coverage beyond the loan term until you reach the age of 95, but you will pay a higher premium.
- Return of Premium Term: If you opt for a Return of Premium Term policy, you can choose an initial term of 20 or 30 years. If you pay all of your premiums and outlive the initial insurance term, the premiums will be returned to you at the end of the policy term. During your term, your premiums build cash value, which you can borrow against.
- Instant Answer Term: With Instant Answer Term insurance, you can get $50,000 in death benefits without a medical exam. People between the ages of 16 and 45 are eligible to apply, and you are covered until age 50 or a maximum of 10 years, whichever is longer.
State Farm’s life insurance policies are available in every state except Massachusetts. State Farm Life Accident Assurance Company handles policies in New York and Wisconsin.
Whole Life Insurance
If you have a whole life insurance policy, you have coverage for your entire lifetime. Whole life policies pay out a death benefit, but they also have a savings component that can accumulate cash value, which can be invested. Monthly premiums use a portion for insurance coverage and a portion for tax-deferred savings.
State Farm has four whole life insurance options:
- Whole Life: Your premiums stay the same your entire life with Whole Life insurance, and you have a guarantee of lifetime coverage.
- Limited Pay Whole Life: With a Limited Pay policy, you only pay premiums for 10, 15, or 20 years. Later on, you still have coverage, but you no longer have to worry about paying monthly premiums.
- Single Premium Whole Life: If you opt for a Single Premium Whole Life policy, you only make one premium payment, and no additional payments are ever required.
- Final Expense: With a Final Expense policy, you can receive $10,000 in coverage for your burial expenses. Premiums remain level and may be payable beyond age 100.
Universal Life Insurance
Universal life insurance is a form of permanent life insurance. Universal life policies tend to have inexpensive premiums and they provide more flexibility than whole life policies. Policyholders can make changes to their policies, including their premiums and death benefits, and a universal life policy can accumulate cash value.
State Farm has three universal life insurance options:
- Universal Life: Universal Life policies are available to people between the ages of 0 and 85, and coverage starts at $25,000. You can lower or raise your coverage and your premiums to fit your changing life. You can choose to receive a death benefit equal to the basic amount of life insurance you chose, or you can opt to receive a death benefit that varies with your account value.
- Survivorship Universal Life: Survivorship Universal Life covers two people and pays benefits only after both individuals have passed away. Coverage starts at $250,000.
- Joint Universal Life: Two people can get coverage, often at a lower cost than purchasing two separate policies. With Joint Universal Life, the death benefit is paid to the beneficiaries upon the death of the first insured. Coverage starts at $100,000.
An insurance rider, also known as an endorsement, is an amendment to an insurance policy that changes the terms of the existing policy. A rider can be added to a policy when you purchase it, mid-term, or when you renew your policy. Riders can be used to add covered individuals, add coverage, or modify existing coverage.
State Farm has a comprehensive list of available riders that you can add to your life insurance policies.
Children’s Term Rider
You can add a children’s term rider to your policy to get temporary life insurance for your children until they turn 25 or until you turn 65. The rider can provide up to $20,000 in coverage for each eligible child in the family. Once your child turns 25, you can convert the rider to permanent insurance for up to five times the amount of coverage. Coverage ranges from $5,000 to $20,000.
The children’s term rider can give you coverage in a worst-case scenario and allows you to add coverage when your child gets older.
Flexible Care Benefit Rider
If you become chronically ill and need long-term care services, the flexible care benefit rider allows you to access a portion of your death benefit each month and waives monthly deductions. The maximum monthly benefit is 2% of the death benefit at the time of the claim.
Guaranteed Insurability Option
You can purchase additional insurance at specific dates without a medical exam with the guaranteed insurability option rider. Option ages are 17, 22, 25, 28, 31, 34, 37, 40, 43, 46, and 49. Coverage ranges from $25,000 to $100,000.
Level Term Rider/Additional Insured
With a level term rider, you can add an additional insured person to your policy. It provides term life insurance to age 95 for the amount of the rider. This rider is not available on policies that have a flexible care benefit rider. The minimum coverage is $25,000.
Waiver of Monthly Deduction for Disability
If you become totally disabled for six consecutive months or more prior to age 60, this rider will waive future monthly deductions as long as you remain disabled. If you become disabled between the ages of 60 and 65, the rider will waive monthly deductions until the third anniversary after total disability or when you turn 65, whichever is later.
State Farm has a number of options to get help with your insurance policies. For quotes and life insurance claims, you should contact a State Farm agent directly. Most agents are available during business hours via phone or email.
If you have general questions about life insurance options and State Farm’s policies, you can call State Farm’s customer service line 24/7 to get help at 800-440-0998. For calls during normal business hours (8 a.m. to 6 p.m. in your time zone), your call will be directed to a local agent. After hours and on weekends, it will be directed to State Farm’s Customer Care Center representatives.
While State Farm doesn’t have an online chat feature, you can file a claim, manage your account, and make premium payments online.
The National Association of Insurance Commissioners (NAIC) maintains a database of consumer complaints about life insurance companies. Each year, the NAIC publishes companies’ complaint ratios, meaning the number of complaints it received adjusted for the companies’ market share.
The NAIC considered scores above 1.0 to be worse than average, and scores below 1.0 to be better than average.
State Farm tends to perform well according to NAIC’s complaint index.
- State Farm Life & Accident Assurance had a complaint ratio of 0.1444 (fewer than average number of complaints)
- State Farm Life Insurance Company had a complaint ratio of 0.24 (fewer than average number of complaints)
Over the past three years, State Farm has consistently had better-than-average complaint ratios.
AM Best is a credit ranking agency focused primarily on the insurance industry. It evaluates insurers’ financial strength, measuring companies’ ability to meet their policy obligations.
The AM Best rating shows how financially stable an insurance company is. The higher the grade, the more financially stable it is. What this means to consumers is the company is likely to be able to pay their claim when the time arises.
AM Best granted State Farm Life Insurance Company and State Farm Life and Accident Assurance Company a Financial Strength Rating of A++ (Superior), its highest rating.
If you’d like to cancel your policy, contact your State Farm insurance agent. Policy terms, policies, and fees can vary by state, so make sure you ask about cancellation fees and free look periods—the time you have to cancel a policy without penalties or surrender charges.
State Farm’s pricing is dependent on a range of factors, including your age, health history, and location. Pricing varies from person to person, so take into account whether you want a term life policy or a whole life or universal policy, how much coverage you want, and what riders you want to add to your policy, which can affect your costs.
Like most life insurance companies, State Farm requires you to apply for insurance as either male or female based on your birth biology. Being nonbinary does not disqualify you from getting life insurance, nor does it mean you’ll pay higher rates. However, you may be restricted by current underwriting processes.
Before applying for a life insurance policy, it’s wise to compare plans from different insurers.
While State Farm is a well-known company, New York Life is a popular choice for life insurance. In fact, it's the third-largest individual life insurance company in the United States based on direct premiums written.
Like State Farm, New York Life has 10 different plan options to choose from and has an A++ rating from AM Best.
|State Farm Life||New York Life|
|Market Share||Seventh largest in U.S., 3.5%||Third largest in U.S., 6.0%|
|Number of Plans||10||10|
|Dividends for 2020||$600 million||$1.9 billion|
|Wellness Program Discounts/Quit Smoking Incentives||Not applicable||Not applicable|
|AM Best Rating||A++ (Superior)||A++ (Superior)|
|Price Rank||Better than most||Better than most|
|Complaints Trend||0.14 Excellent||0.15 Excellent|
While both are excellent insurance companies, New York Life edges out State Farm as the better choice. It has more product lines than State Farm, including insurance riders that cover chronic care, critical illnesses, and living benefits. New York Life also has stellar customer service. Unlike State Farm, which only has insurance agents, New York Life connects you with financial professionals to come up with a strategy and select the best insurance policies for your needs. It's a more personalized approach to life insurance that gives New York Life the advantage over State Farm.
If you are looking for a life insurance policy, State Farm is an excellent choice. With a range of life insurance plans to choose from, multiple payment options, and riders you can add to customize your policy, you can design a life insurance policy to fit your family’s unique needs. State Farm has a strong reputation and has an A++ rating from AM Best, the highest possible rating, so you can have confidence that your policy will be honored.
How We Review Life Insurance Companies
Our reviews of life insurance companies are based on a quantitative approach that analyzes each insurer on their stability and reliability, customer service, claims experience, diversity of product lines, and cost. We compare the terms of each type of policy offered—including available coverage amounts, optional riders, and premium payment options—with that of other major life insurance companies. Lastly, we look at how the company is rated by third-party organizations to determine its reliability and overall reputation. Read our full life insurance review methodology.
National Funeral Directors Association. "Statistics." Accessed July 22, 2020.
Insurance Information Institute. "Facts and Statistics: Life Insurance." Accessed July 23, 2020.
National Association of Insurance Commissioners. "What Is an Insurance Endorsement or Rider?" Accessed July 23, 2020.
National Association of Insurance Commissioners. "Complaint Index." Accessed July 23, 2020.
National Association of Insurance Commissioners. "Consumer Insurance Search Results-State Farm Life." Accessed July 23, 2020.
Businesswire. "AM Best Affirms Credit Ratings of State Farm Mutual Automobile Insurance Company; Takes Various Credit Rating Actions on Subsidiaries." Accessed July 23, 2020.