State Farm Life Insurance: The Pros and Cons

Shawn Plummer

CEO, The Annuity Expert

State Farm life insurance is a popular choice for many Americans. But is it the best option for you? In this review, we will take a look at the pros and cons of State Farm’s life insurance policies. We will also discuss how to determine if State Farm is the right choice for you.

Pros and Cons

  • State Farm is one of the biggest and best insurance companies in the United States.
  • Their current financial ratings are A++ with A.M. Best and AA with S&P.
  • State Farm offers term, whole, and universal life insurance policies.
  • There is a wide range of life insurance options
  • You can convert your term policy to permanent coverage
  • No-exam insurance is available
  • Life insurance State Farm offers is only State Farm life insurance products, and no other companies.
  • Options are minimal.
  • The cost can be expensive compared to other insurance companies.
  • You need to get a quote from a life insurance agent for permanent insurance.
  • You can only choose 10, 20, or 30 years for term insurance.
  • I did not see a life policy with no medical exam option.
  • $100,000 is the minimum coverage amount.
  • 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
  • Not available in Massachusetts or Rhode Island
  • Policies must be purchased through a State Farm insurance agent
  • No literature pressing if they accept foreign nationals.
  • Can’t apply for all life insurance types without a State Farm insurance agent.

About State Farm

State Farm was founded in 1922. It provides life insurance, home and renters insurance, auto and specialty vehicle insurance, health insurance, and pet insurance. State Farm also offers home and car loans, checking and savings accounts, credit cards, investments, and other financial services. It is based in Bloomington, Illinois.

How Much Does State Farm’s Life Insurance Cost?

State Farm’s prices vary depending on a range of factors. These include your age, health history, and location. The price also depends on 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.

For a State Farm 20-year, $1 million term policy for non-smoking applicants with average health, the monthly premium is this:

  • 35-year-olds: $62.19
  • 45-year-olds: $134.44
  • 55-year-olds: $329.74
  • 65-year-olds: $1,006.64

Compared with their competition, a 20-year, $1 million term policy for non-smoking applicants with average health, the monthly premium is this:

The cost of life insurance goes up a lot as you get older due to life expectancy and health status. And because State Farm charges DOUBLE the cost of other life insurance companies, buy it when you are younger, it will be more affordable.

State Farm’s life insurance coverage calculator asks potential customers to consider factors such as marital status, age, location, living situation, mortgage, and other debts, children or other dependents, current income, current assets, and other priorities such as charitable giving.

For more information on term life insurance policy costs, visit our Life Insurance Quotes page. Most State Farm insurance policies offer a multiline discount for purchasing multiple insurance policies, such as a combination of auto insurance and life insurance.

State Farm Term Life Insurance

State Farm offers three types of term life insurance policies: Select Term Life, Return of Premium Term Life, and Instant Answer Term Life.

Term life insurance from State Farm is as follows:

  • Select Term Life Insurance policies are available in 10, 20, and 30-year durations.
  • Return of Premium Term Life policy is available in 10, 20, and 30-year durations.
  • Instant Answer Term Life policy comes in a 10-year term or up to age 50.
  • Monthly premiums are guaranteed to be level throughout the policy.
  • You can get life insurance coverage for $100,000 with Select Term Life, and for $50,000 with Instant Answer Term Life. If you want Return of Premium Term Life coverage, your policy will start at $100,000.
  • Select Term Life policy has issue-age restrictions of 18 to 75 for Select Term 10, 18 to 65 for Select Term 20, and 18 to 45 for Select Term 30.
  • Their Return of Premium Term Life policy has restrictions on who can buy it. You have to be between 18 and 60 to buy a 20-year policy, and between 18 and 45 to buy a 30-year policy. If you smoke, you can only buy a policy up to age 55.
  • The Instant Answer Term Life policy can only be issued to people between the ages of 16 and 45.
  • Select Term Life and Return of Premium Term Life policies can be applied online, and the Instant Answer Term Life policy provides online estimates.

Other things to be considered:

  • Select Term Life and Return of Premium Term Life policies can be converted to permanent life policies without any fees or medical exams. The Instant Answer Term Life policy can be converted to permanent life insurance up to age 50 or 10 years after the policy is issued.
  • Death benefits (face value) are usually paid in one lump sum, but there may be other options available.
  • All three policies offer a waiver of premium for disability. The Select Term Life policy and the Return of Premium Term Life policy also offer a children’s term rider. The Select Term Life policy offers a select term rider too.
  • There are online tools that can help you with your life insurance. You can use these tools to get quote estimates for the Select Term Life and Return of Premium Term Life policies.
  • All three policy types provide a tax-free death benefit. The Return of Premium Term Life policy also provides a tax-deferred cash value that can be accessed during the policyholder’s lifetime.
  • Another feature of our insurance policies is the multiline discount. This means that you can get a discount if you buy more than one insurance policy, such as auto and life insurance.

For more information visit our What is Term Life Insurance? guide.

State Farm Whole Life Insurance

There are four types of State Farm whole life policies: Final Expense, Limited Pay Life, Single Premium Life, and Whole Life.

State Farm’s whole life insurance policies are:

  • Offers coverage for life.
  • You can buy a whole life insurance policy with level premiums that are guaranteed. There are also annual and monthly premium options for the Final Expense policy, and a single premium type for the Single Premium Life policy.
  • State Farm Final Expense minimum coverage starts at $10,000.
  • If you want limited-pay life insurance, you can choose a payment term of 10, 15, or 20 years. The minimum coverage amount is $50,000 for 20 years, $100,000 for 15 years, and $250,000 for 10 years.
  • Single-Premium Life coverage minimums start at $15,000.
  • Whole Life minimums start at $25,000.
  • The Final Expense policy is available for customers who are 50 to 80 years old, but it is not available in New York. The policy is available for customers ages 50 to 75 in New York.
  • Limited Pay Life policy is available for applicants, ages 0 to 85.
  • The Single-Premium Life policy is available for ages 0 to 80.
  • Whole Life policies are available for ages 0 to 85.
  • Final Expense policies offer an online estimate, while the other three policies offer an online application.

Other things to consider:

  • There are no variable universal life insurance options available.
  • If a policy is canceled, the policyholder is entitled to any money that is in the cash value.
  • Final Expense and Whole Life premiums can be paid out over a lifetime. Single-Premium Life requires a one-time payment. Limited Pay Whole Life premiums can be paid out over 10, 15, or 20-year terms.
  • Death benefit options generally are paid in a lump sum, and sometimes in a series of payments.
  • The Limited Pay Life and Whole Life policies offer a waiver of premium for disability riders, payor insurance riders, and guaranteed insurability option riders. Additionally, the Whole Life policy also offers a children’s term rider and select term rider.
  • State Farm’s online tools can help you calculate your insurance coverage, get estimates, and apply for policies. You can also find customer service and document processing tools on the web.
  • These four policies have some financial benefits. The tax-free death benefit and eligibility for dividends are two examples. The Limited Pay Life, Single Premium Life, and Whole Life policies also have a tax-deferred cash value that can be accessed during the policyholder’s lifetime.
  • You can save money on your insurance if you buy more than one insurance policy.
  • The Limited Pay Life policy and Whole Life policy have flexible premium payments that can be monthly, quarterly, semiannually, or annually.

For more information visit our What is Whole Life Insurance? guide.

State Farm Universal Life Insurance

State Farm offers three types of universal life policies: Universal Life Insurance, Survivorship Universal Life Insurance, and Joint Universal Life Insurance.

State Farm’s universal life insurance policies are:

  • Coverage is for life.
  • This policy offers a variety of options to pay premiums.
  • Universal Life Insurance minimum coverage starts at $25,000.
  • Survivorship Universal Life Insurance minimum starts at $250,000.
  • Joint Universal Life Insurance policies start at $100,000 in coverage.
  • Universal Life Insurance is available for applicants, ages 0 to 85.
  • Survivorship Universal Life Insurance policies are available for ages 18 to 90.
  • Joint Universal Life Insurance is available between ages 18 to 85.
  • You can apply for Universal Life Insurance online, and you can also get estimates for Survivorship, Universal Life Insurance, and Joint Universal Life Insurance online.

Other things to consider:

  • There are no variable universal life insurance policies available.
  • These policies offer premiums that can be changed.
  • These policies provide tax-deferred money that can be taken out during the person’s life.
  • If a policy is canceled, the insurance company must pay out the cash value of the policy to the policy owner.
  • Premiums can be paid out over a lifetime.
  • Death benefits are paid in a lump sum.
  • There is a waiver of monthly deduction for disability rider and level term rider.
  • The children’s term rider, guaranteed insurability option, and flexible care benefit rider are all included in the Universal Life policy.
  • The Survivorship Life Insurance policy has a provision for estate preservation.
  • The children’s term rider and assured insurability option are available on the Joint Universal Life Insurance policy.
  • State Farm provides a variety of free online tools to help you with your insurance needs. This includes a coverage calculator, estimates, customer service, and document processing.
  • These policies provide a death benefit that is tax-free and a cash value that grows over time. This cash value can be accessed during the insured’s lifetime.
  • The Universal Life Insurance and Joint Universal Life Insurance policies also earn interest that is credited to the account value. This means that the money in your account will grow over time.
  • The Universal Life Insurance policy has two death benefits. The first is a fixed amount of life insurance, and the second is an amount that changes depending on how much money is in the policy account.
  • The Survivorship Universal Life Insurance policy has coverage for two people. The premiums are added to the account value, which can be used to pay for monthly insurance expenses. There is also a discount available for purchasing multiple policies.
  • The Joint Universal Life Insurance policy also offers premiums that are added to the account value and a discount for buying multiple policies.

For more information visit our What is Universal Life Insurance? guide.

Available Riders For State Farm Life Insurance Policies

An insurance rider, or endorsement, is a change to your insurance policy. The rider can be added when you buy the policy, during the middle of the policy, or when you renew it. Riders can be used to add people who are covered by the policy, add more coverage, or change the coverage that is already included in the policy.

State Farm offers a variety of riders that you can add to your life insurance policy.

Children’s Term Rider

You can add a children’s term rider to your State Farm insurance policy to get life insurance for your children until they turn 25 years old or you turn 65 years old. The rider will provide up to $20,000 in coverage per eligible child in your family. Once your child turns 25, you can convert the rider to a State Farm permanent insurance policy for up to five times the coverage amount.

The children’s term rider can give you insurance coverage if something bad happens. And if something bad happens later, you can add more coverage.

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. This rider also waives monthly deductions. The maximum monthly benefit is 2% of the death benefit at the time of the claim.

Guaranteed Insurability Option

If you want to buy more insurance without doing a medical exam, you can add the guaranteed insurability option rider to your policy. This will let you buy more insurance on specific dates, between the ages of 17 and 49. The coverage will be from $25,000 to $100,000.

Level Term Rider/Additional Insured

A level-term rider is an addition to your life insurance policy. This rider gives term life insurance for up to 95 years old. It is available for people who have a flexible care benefit rider on their policy. The minimum coverage is $25,000.

Waiver of Monthly Deduction for Disability

This rider will waive future monthly deductions if you become disabled for six consecutive months or more prior to age 60. If you become disabled between the ages of 60 and 65, the rider will waive monthly deductions until three years after total disability or when you turn 65, whichever is later.

Customer Service

State Farm has a lot of different ways for you to get help with your insurance policies. You can contact an agent directly by phone or email during business hours.

If you have questions about life insurance options or State Farm’s policies, you can call State Farm’s customer service line at 800-782-8332.

You can file a claim, manage your account, and make premium payments online without the help of an online chat feature if you are a policyholder of State Farm.

Cancellation Policy

If you want to cancel your insurance policy, contact your State Farm agent. Each state has different terms, policies, and fees. Make sure to ask about cancellation fees and free look periods which is the time you have to cancel a policy without penalties or surrender charges.

Complaints

The National Association of Insurance Commissioners (NAIC) keeps track of how many people complain about life insurance companies. Each year, NAIC publishes how many complaints a company gets for every one hundred policies it sells.

The NAIC considered scores above 1.0 to be worse than the average, and scores below 1.0 to be better than the average.

State Farm generally fares well when compared to other insurance companies according to NAIC’s complaint index.

  • The complaint ratio for State Farm Life & Accident Insurance was 0.12.
  • The complaint ratio for State Farm Life Company was 0.24.

Financial Strength And Claims Paying Ability

AM Best is a company that evaluates the financial strength of insurance companies. This is important because it shows how well an insurance company can meet its policy obligations.

The AM Best rating shows how financially stable an insurance company is. The higher the grade, the more financially stable it is. This means that if something happens and you need to make a claim, the company is more likely to be able to pay you what you are owed.

Both State Farm Life Insurance Company and State Farm Life and Accident Assurance Company have a Financial Strength Rating of A++ (Superior), AM Best’s highest rating.

Before Buying Life Insurance

State Farm Life Insurance

Before comparing companies, decide the type of policy you want. Calculate how much coverage you’ll require and how long your coverage should last. Ensure that the insurers you’re looking at offer the coverage you need. When comparing competitive rates, ensure you’re getting quotes for the same amount of coverage. Also, double-check that the policy’s medical criteria are appropriate for you.

To purchase life insurance, compare quotes from multiple companies. The research is just like when you are shopping for car insurance. You want to find the policy with the cheapest rates. That’s because the insurance is mainly for death benefit planning. Make sure to purchase life insurance from a company with an A.M. Best rating of “A-” or better.

You can get a significantly cheaper rate for life insurance for final expenses or whatever else if you shop around. In addition, you can almost certainly acquire coverage with no waiting period.

The most significant disadvantage of State Farm Life is that you’re dealing with a captive insurance company. However, if you work with an independent agency, you can save up to 70% on your life insurance.

When you contact a representative, they cannot go through other insurance providers to show you one that can provide you a better price. In essence, an independent licensed insurance agent such as The Annuity Expert will search the market for you to determine which insurance carrier offers the best rate and coverage for your specific needs.

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Final Thoughts

If you are in the market for life insurance, State Farm is definitely a company to consider. They offer a wide range of policies and their customer service is excellent. However, be prepared to pay double the cost than you would with other insurers. Request a quote today and see how much you could save.

Need Help Getting Life Insurance Coverage?

If you have a preexisting medical condition and want to buy life insurance, you will need help from an expert. This person can help make sure that you get coverage so that you don’t get declined.

Warning: Applying for life insurance without a medical exam can be risky. If you get declined coverage, it could be at least two years before you are able to get any life insurance.

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Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

The Annuity Expert is an online insurance agency servicing consumers across the United States. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

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