State Farm is one of the most recognizable insurance providers in the insurance industry.
State Farm offers insurance coverage like auto insurance, home insurance as well as several different types of life insurance products and has been since 1922.
They are mostly known for their auto and home insurance, however, they do provide life insurance options as well excluding coverage in Massachusetts, Wisconsin, and New York.
It may be easy to purchase a life insurance policy with State Farm, especially if you already have a local agent that you use, but there are several reasons why they may not be the best life insurance company for you.
We’ve done considerable research on State Farm life insurance policies, so let’s dive into the life insurance methodology for a full breakdown.
In This Review:
State Farm Life Insurance Products Offered
State Farm Life Insurance Company offers several coverage options depending on the type of policy that works best for your particular situation.
- Term Life Insurance Policy
- Select Term Life Insurance
- Instant Answer Term Life
- Return of Premium Term Life
- Universal Life Policies
- Joint Universal Life
- Survivorship Universal Life Insurance
- Whole Life Insurance Policies
- Single-Premium
- Limited Pay
- Final Expense
Each type of policy has its pros and cons. A lot of variables go into your life insurance costs including the amount of death benefit or your health, which decides what level premium you’re awarded.
Term Life Insurance
Here’s a quick breakdown of the differences between Term Life Insurance and Whole Life Insurance.
Term life insurance is usually the cheaper option between the two because it is a temporary policy.
You can choose your length of coverage–think 10,20,30 year terms vs. whole life insurance which offers lifetime coverage.
Term Life is generally better for younger customers because the lower rates are awarded to those in great health.
State Farm does not offer a return of payout for their term life insurance policies like other companies, meaning you do not get back all the money you’ve paid in your monthly premiums once the term is over.
Whole Life Insurance
Whole life policies offer guaranteed coverage for life, no matter how your health may decline in the future.
Because there’s a greater risk the life insurance company will be paid out, meaning they will have to award the money to your benefactor.
State Farm offers several cash value options with your whole life policy, including a tax-deferred option.
State Farm Life Insurance Riders Offered
It’s always a good idea to check out any potential additional life insurance riders as State Farm offers numerous including:
- Flexible care benefit rider
- Long-term care rider
- Waiver of premium for disability rider
- Accidental death or dismemberment rider
State Farm Life Insurance Application Process
State Farm makes it easy to get a quote, offering many quotes through their mobile app or website www.statefarm.com.
Keep in mind that not all types of coverage are available for online life insurance quotes.
As an added bonus, you may also pay your monthly premium payments through their mobile app, making it easier than ever to keep track of your payments.
State Farm Life Insurance – The Pros
State Farm stands out as an insurance company many people enjoy working with and for.
The Better Business Bureau (BBB) rates them with an A+ and according to the National Association of Insurance Commissioners (NAIC) they have a fewer number of complaints than other insurance companies.
Their name has been recognizable for years and has stood the test of time for good reason.
A.M.Best awards them an A++ and J.D. Power gives them a rating of 5 out of 5.
With over 19,000 agents across the company and a commitment to local community aid, there are a few standout factors to like about State Farm Insurance.
Customer Service
A lot of life insurance companies tend to have more negative reviews than normal companies because customers are prone to write about bad experiences vs good experiences.
However, with State Farm that ratio is the opposite. J.D. Power has State Farm ranked number one in the customer satisfaction category and there are numerous glowing reviews of how State Farm handles claims and issues their customers have.
It is refreshing to see a life insurance company put an emphasis on treating the client right.
There are some life insurance carriers that will just approve your application and then you’ll either never hear from them again or you have trouble getting ahold of the company.
Financial Strength
Throughout their entire history, State Farm has always been a highly rated carrier from the industry’s rankers, garnering an A++ from A.M Best, and an Aa1 from Moody’s.
State Farm has always paid great dividends, totaling $574M in 2017 going to policyholders. And they had $5.3B in premium income for 2017.
All of this means that if you have a policy with State Farm you will never have to worry about them not paying a claim. Which is a reassuring thought for the client.
State Farm Life Insurance – The Cons
We’ve talked about some things that make State Farm a standard in the insurance industry, but we want to let our readers know that there might be a few things to look at for as you look for life insurance coverage through State Farm.
While we rarely will tell you to never buy a policy with a certain insurer, take some of these things into account after you’ve talked with a local State Farm agent before you sign on the dotted line.
Pricing
The first reason I’m not high on State Farm is simply that life insurance with them is not cheap.
For example, a 35-year-old woman would pay around $44 per month for a $500,000 30 year term with State Farm, while there are numerous companies offering the same policy for around 20-30% less than what State Farm charges.
One of the most important factors that applicants look at when they are going through the life insurance process is costs.
Nobody wants to pay more for their life insurance coverage than they have to.
Plenty of different factors have an effect on what kinds of rates you might see; these also vary widely from insurer to insurer.
While State Farm typically isn’t the lowest option, there are some lifestyle changes that you can make to get the most affordable life insurance plan for your family.
The first thing to do is to focus on your health.
You can do this by starting a diet, getting regular exercise, and eliminating any tobacco usage.
In fact, quitting smoking could cut your premiums in half, which can save you hundreds of dollars every year for your coverage.
Choices
When working with State Farm you will only get quotes from State Farm.
I always recommend comparing several top companies when shopping for life insurance, and State Farm agents only represent State Farm and no other companies.
When you choose an independent life insurance agency (which is what we are), we help you compare pricing from among 30 top life insurance carriers, helping you find the best price.
With State Farm, you won’t have the ability to compare various quotes.
Unlike traditional insurance agents, independent insurance agents don’t represent one single company like State Farm.
Instead, our agents are licensed to sell policies from 30 highly-rated companies across the United States. This means that we can connect you with the best policy to fit your needs.
Underwriting
The underwriting practices at State Farm are known for being conservative. What does this mean?
It means that if you have high blood pressure, high cholesterol, or perhaps a pre-existing condition – like diabetes – you may be charged very high rates, or not get approved at all.
In addition, if you are considered high risk and have a more serious pre-existing condition, you are likely to get denied.
The vast majority of applicants have high blood pressure or high cholesterol. So State Farm is going to be too expensive for most consumers.
Even though you’re in good health, aside from high cholesterol, State Farm is going to give you much higher rates because of your higher risk.
State Farm Life Insurance Contact Information
Here’s a quick list of their contact information:
- Phone Number: 800-STATE-FARM (800-782-8332)
- Headquarters: Bloomington, Illinois
- Website: statefarm.com
Working With An Independent Life Insurance Agent
Each life insurance carrier has different guidelines for what they will or won’t approve. And we know which companies to use for what health situation, age, and the coverage amount.
Don’t make the mistake of not having the appropriate coverage in place for your family.
They would be left with a massive amount of debt. This can make an already difficult situation of losing a loved one thousand times more difficult.
Regardless of which insurance company that you choose, it’s vital that you purchase enough insurance coverage for your family.
Our overall philosophy is that you should shop for the best rates among highly rated companies.
