Like a good neighbor, State Farm is there.
Few companies play as significant of a role in insuring America as State Farm does.
With policies in more households than almost any other provider, the neighborly company provides individuals with multiple lines of insurance.
But there’s more to a being a great company than having a big brand and massive marketing arsenal, especially where a major purchase like life insurance is concerned.
To decide whether or not State Farm is the life insurance company for you, you need to take a close look at its history, financial strength, and products.
Armed with those important details, you can go forth and purchase a policy with peace of mind.
Our State Farm Life Insurance Company Review
The story of State Farm begins almost a century ago, in 1922.
George Mecherle, a former farmer and insurance salesman, combined his professional experiences to form State Farm.
While the company began strictly as an auto insurer, it has since expanded its product lineup to include several other types of insurance.
State Farm is a mutual insurance company, meaning it is owned only by policyholders.
No shares can be bought from any stock exchange because the company isn’t listed. In order to own a piece of the company, you must be a policyholder.
Mutual companies remain strong and focused throughout the ups and downs of the everchanging economy.
In addition to supporting the customers at its core, State Farm is recognized for being an exceptional employer.
The company has been awarded as one of the top military employers by GI Jobs, along with receiving a slew of awards for equality, diversity, and overall workplace quality.
State Farm is also hailed for its community involvement, partnering with organizations to impact local communities through volunteering, donating, and providing annual charitable grants.
Their goal is to help build safer, stronger, and better-educated individuals and communities.
Financial Strength and Ratings
State Farm is widely popular and recognized for its admiral business practices and volunteerism, but there’s more to consider when you select a life insurance company.
You also need to look at its financial viability.
State Farm is ranked in the top 50 on the Fortune 500 list, with assets totaling $16.9 billion.
State Farm insures more automobiles and houses than all the other carriers in the United States, but they’re also a major life insurance underwriter.
The company has 8 million life policies in force, with 82.9 million policies across all of its insurance niches.
Credit ratings are another helpful tool for assessing a company’s financial strength.
They use a company’s financial performance and future outlook to determine its ability to meet its financial commitments, in this case, by honoring your life insurance policy.
State Farm also holds an A rating with the Better Business Bureau, though they aren’t BBB-accredited.
Based on State Farm’s financial performance and credit ratings, you can rest assured you’re partnering with a viable company if you choose to insure your car, home, or even your life with State Farm.
The next factor you need to consider in your evaluation of State Farm is the selection of life insurance products it offers.
State Farm provides applicants with access to term, universal, and whole life insurance.
Let’s take a closer look at each of those policies.
Term life insurance provides you with the protection your family depends on for the length of time you need it.
Since you aren’t purchasing coverage for the entirety of your life, term life insurance is far more affordable than other types of policies.
State Farm offers 3 term life products:
- Select Term Life Insurance: Coverage begins at $100,000, with 10-, 20-, and 30-year terms. Policies can be renewed up to age 95, with premiums increasing after the term is up. Policies can also be converted to permanent life insurance.
- Return of Premium Term Life Insurance: This policy provides the same protection, renewal terms, and convertibility as Select Term, but comes in 20 and 30-year terms. If you outlive your policy, your premiums are returned to you. Just note this feature makes the policy more expensive.
- Instant Answer Term Insurance®: Applicants between the ages of 16 and 45 can get a $50,000 death benefit, lasting the longer of 10 years or the policyholder’s 50th birthday. With this no exam policy, you apply for coverage, get an instant decision, and head to an agent’s office to buy your policy.
If you’re looking for a more permanent solution, State Farm has you covered.
Universal life insurance is the most affordable permanent life insurance product, allowing you to alter the coverage and cost of your policy as your needs change.
The policy includes a tax-deferred cash value in addition to the face value of your policy, which accumulates at a guaranteed minimum interest rate.
If you ever need to tap into additional funds, you can access the cash value of the policy.
You can further customize State Farm’s universal policies with the following waivers and riders:
- Children’s Term Rider
- Flexible Care Benefit Rider
- Guaranteed Insurability
- Level Term Rider
- Waiver of Monthly Deduction for Disability
Additionally, State Farm offers joint and survivorship universal policies, which cover not one, but two policyholders.
Joint universal life insurance from State Farm begins at $100,000, covering individuals between the ages of 20-85.
The policy pays out when the first policyholder passes away.
While joint policies are made with your spouse’s well-being in mind, survivorship insurance is designed to protect your heirs, paying out when both you and your partner pass.
Coverage begins at $250,000 and can be obtained between the ages of 18 and 90.
In addition to term and universal life insurance, State Farm offers whole life insurance to applicants.
Like universal life insurance, whole life insurance comes with both a death benefit and a growing cash value.
It also provides you level premiums and a guaranteed death benefit effective for your entire life, as long as you faithfully pay your premiums.
You may also take out a loan from the cash value of your policy, noting that it will accrue interest. If left unpaid, it could lessen the death benefit your beneficiaries receive.
State Farm’s whole life policies come with a couple of payment options:
- Single Premium Life: You can opt for a single payment, where you pay for your policy upfront.
- Limited Pay Life: With this option, you make payments for a pre-determined number of years, or make payments up to age 100.
Whichever option you choose will impact the cost of premiums.
State Farm also offers small final expense policies, with a death benefit of $10,000 and guaranteed premiums through age 100.
While your search for life insurance may have started with State Farm, it shouldn’t end there.
Before you lock into a policy with State Farm or any other company, be sure to do your homework.
Comparing multiple companies could save you money and point you to the best policy for your needs.
Take a look at the alternatives to State Farm below:
- Haven Life: If you like State Farm’s simple term life insurance but want to purchase your policy online, look at Haven Life. The industry leader offers instant decisions and you could get up to $3 million in coverage, all from the comfort of your couch.
- Protective: For virtually unbeatable prices on universal coverage, look no further than Protective. They offer indexed and variable options, with affordable premiums and the flexibility to mold the policy to your needs and goals.
- Prudential: State Farm is known for its conservative underwriting. If you’re a high-risk applicant, consider Prudential. They offer the most relaxed underwriting you’ll find, providing you with the coverage, and savings, you need.
There’s a reason State Farm is one of the most popular insurance companies in the nation.
Here are a few key advantages to purchasing life insurance from State Farm:
- Financial strength: State Farm has an excellent reputation in the life insurance industry, with years of proven success, strong financial performance, and high marks from credit rating agencies and the BBB.
- Policy lineup: State Farm offers an impressive array of temporary and permanent life insurance solutions, with flexible payment options, riders, and other tools that allow you to tailor a policy to meet your needs.
- Product variety: State Farm also offers insurance products for health, motorcycle, condo/renters, sporting, disability, long term care, and more. If you’d like to manage all of your insurance products in one place, State Farm has you covered.
- Transparency: While some companies make getting quotes or discovering policy details difficult without speaking to an agent, State Farm provides adequate information on its website to help with your preliminary research.
Along with the benefits State Farm offers policyholders, there are a few potential downsides to working with the insurance company.
Consider the following:
- Availability: State Farm is not licensed to sell life insurance in New York, Wisconsin, and for some policies, Massachusetts. If you live in those states, you won’t be able to purchase life insurance from State Farm.
- Cost: State Farm doesn’t offer the most competitive prices. In general, you’ll end up paying more for a State Farm policy than you would with one of the nation’s top life insurance providers.
- Underwriting: State Farm’s underwriting criteria make it exceedingly difficult to access State Farm’s lowest rates. And if you have any health-related risk factors, you can expect to pay a pretty penny for coverage or be denied approval altogether.
- No variable policies: State Farm discontinued its variable universal life insurance product in 2008. If you’re looking for this type of policy, you’ll have to purchase it from another company.
As you can see, State Farm is a trustworthy provider with plenty of positive attributes.
Its reputation, financial performance, and product selection are commendable.
If you’re all about carrying all your insurance policies in one place, State Farm is a safe bet, as long as you don’t mind a higher price tag.
On the other hand, if you suffer from any kind of health risks, State Farm isn’t your ideal option.
Whatever your health status or policy needs, take the time to compare quotes from a handful of providers.
A few minutes getting quotes today could save you from a headache, and hundreds or thousands of dollars, down the line.