State Farm is best known for auto and home insurance, but it also sells life insurance. So how does it stack up against the best life insurance companies?
This guide breaks down the pros and cons of State Farm’s life insurance products and how their life insurance underwriting compares to other top insurers.
Quick Facts About State Farm Life Insurance
State Farm is a well-known insurance company.
- Founded: 1929
- Policies In Force: Over 7.8 million life insurance and annuity contracts
- Availability: Not available in Massachusetts. An affiliate issues NY & WI policies.
Financial Strength Ratings
State Farm is financially strong. It holds high marks from all major rating agencies.
- AM Best Rating: A++ (Superior) – Shared by top-tier companies like Guardian, Mass Mutual, New York Life, and Northwestern Mutual.
- Fitch Rating: AA – A strong rating reflecting financial stability.
- Moody’s Rating: Aa1 – The third-highest rating, similar to Allstate (Aa3) and Guardian (Aa2).
- S&P Rating: AA – Comparable to companies like Guardian (AA+) and Lincoln National (AA-).
These ratings highlight State Farm’s ability to meet obligations and reflect its conservative approach as a mutual holding company.
Term Life Insurance by State Farm
State Farm’s Select Term product includes:
- Coverage starting at $100,000
- Term Lengths – 10, 20, or 30-year term
- Issue Ages:
- 10-year – Ages 18-75
- 20-year – Ages 18-65
- 30-year – Ages 18-45
- Available Riders:
- Children’s Term Rider – (up to $20,000 per child)
- Term Riders – (10, 20, or 30-year riders for you or an additional insured)
- Waiver of Premium for Disability
Cost Comparison: State Farm’s term life rates are significantly higher than those of competitors. For example, a 45-year-old male in Florida seeking $500,000 of 20-year term life insurance would pay:
- State Farm’s annual rate is $655.
- John Hancock – $534
- Banner Life – $534.88
- Symetra – $538.02
- Corebridge Financial – $538.10
- Protective Life – $538.13
- Pacific Life – $541.10
- Transamerica – $545.00
- Prudential – $570
- Securian – $580.90
Better options are available elsewhere if you’re shopping for term life insurance.
Universal Life Insurance by State Farm
State Farm offers a universal life insurance policy that can build cash value over time.
- Coverage Amounts:
- Ages 0-17: $25,000+
- Ages 18-54: $50,000+
- Ages 55-85: $25,000
- A choice of level or increasing death benefit
- Riders available:
- Level Term Rider
- Children’s Term Rider
- Guaranteed Insurability Option
- Waiver of Monthly Deduction for Disability
- Flexible Care Benefit Rider
The Guaranteed Insurability Option is unique. It allows policyholders at ages 17, 22, 25, 28, 31, 34, 37, 40, 43, 46, and 49 to buy more coverage at standard rates without medical underwriting.
State Farm Survivorship Universal Life
State Farm offers a survivorship life insurance policy for estate planning:
- Coverage Amounts Start at $250,000
- Issue Ages – 18-90 (18-78 in CA)
- Riders Available:
- Estate Preservation Rider
- Level Term Rider
- Waiver of Monthly Deduction for Death or Disability
Estate Preservation Rider—This rider provides additional coverage during the first four years of the policy to aid in estate planning.
Joint Universal Life Insurance (First-to-Die Policy)
This is a unique product in the industry. It covers two individuals but pays the death benefit upon the death of the first person.
- Coverage starts at $100,000
- Issue ages: 18-85
- Riders include Level Term Riders, Children’s Term Riders, Waiver of Monthly Disability Deduction, and Guaranteed Insurability Option.
Whole Life Insurance by State Farm
State Farm offers a dividend-paying whole life insurance policy with flexible payment options:
- Traditional Pay – Premiums paid to age 100
- Limited Pay – 10, 15, or 20-year premium payment options
- Single Premium – One-time payment for lifetime coverage
- Final Expense – A simplified issue whole life policy with a maximum of $15,000.
- Riders Available:
- Waiver of Premium
- Guaranteed Insurability
- Payor Insurance Rider
- Dividends may be paid depending on the company’s performance.
Overall, State Farm’s life insurance products are designed to provide flexible coverage options, help customers protect their loved ones, and plan for the future.
Customer Service
State Farm consistently ranks among the best for customer service in the insurance industry.
- Multiple Contact Channels: Policyholders can reach agents via phone, email, and social media.
- 24/7 Support: Customer service representatives are available around the clock.
- Strong Agent Network: With a large network of licensed agents, policyholders have direct access to guidance and support.
However, since State Farm sells life insurance only through captive State Farm agents, you won’t get access to multiple carriers or competitive rates unless you shop independently.
FAQ
Yes, State Farm is financially strong and has excellent customer service. However, its life insurance rates are often higher than what you’ll find from other top companies. It’s a reliable choice, but not always the most affordable.
State Farm’s term life insurance costs more than that of many other companies. For example, a healthy 45-year-old male in Florida might pay around $655 per year for a 20-year, $500,000 policy, while other insurers offer similar coverage for under $540.
Yes. State Farm offers traditional whole life insurance, limited pay whole life (with terms of 10, 15, or 20 years), and a single premium option. It also offers a small final expense policy for up to $15,000.
Not directly. You can’t buy a policy online without working with a State Farm agent. Unlike other insurers, State Farm only sells through its agents, which limits your ability to compare quotes easily.
Final Thoughts
State Farm is a reputable insurer with a strong financial foundation and consistently high customer satisfaction ratings. However, its life insurance products may be more expensive compared to those of other providers.
It’s advisable to compare quotes from multiple insurers to ensure you’re getting the best value for your coverage needs.
If you need assistance comparing life insurance options, feel free to reach out for personalized guidance.