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State Farm Life Insurance Review


Rating: 9.5 / 10 (Excellent)
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State Farm is one of the largest providers of insurance policies in the U.S. Founded in Illinois in 1922, they offer three major types of plans: Term, Whole, and Universal, with a large variety of options for flexible coverage. Consistent customer satisfaction remains one of State Farm's most important priorities, and they consistently receive high ratings in this area. State Farm has an excellent four-star TrustPilot score.

Background-State Farm Life Insurance

State Farm was founded in 1922 by George J. Mecherle, a retired Illinois farmer. Initially focusing on auto insurance for his fellow land workers, the company Mecherle founded moved into other areas and started to offer life insurance right at the beginning of the Great Depression. They are currently the 8th largest provider of life insurance servicing 7.8 million policies across the US and Canada. State Farm offers life insurance in all states except for Massachusetts, Wisconsin and New York. 

The stalwart company is a recognized leader in the life insurance industry and currently offers three major type of life insurance policies; Term life, Whole life and Universal life. These life insurance categories are further sub-divided into more detailed plans that offer its own unique coverage and rider options. Term Life Insurance is available at 10, 20 and 30 years and is offered up to age 95. Optional services also include managed accounts, retirement and estate planning, annuities and long term care. The company also offers 24/7 support for both claims and payment services.

Company Reputation

State Farm Is the country's #1 insurer of individual life insurance policies. They are a Fortune 500 company and employ more than 65,000 people. It would indeed be difficult to obtain a better reputation than State Farm. They are consistently ranked among the highest in all agencies.

Standard and Poor's

AA

Moody’s Rating

Aa1

A.M. Best FSR

A++

Fitch Ratings 

AA+

 

Customer Experience

The National Association of Insurance Commissioners gave State Farm a complaint ratio of .13 for 2015. While this is higher than average for the companies we rank, it's on the low end considering the life insurance industry as a whole. For 2015, JD Power assigned State Farm a satisfaction score of 823 giving them the "Highest Customer Satisfaction Among Life Insurance Providers." The combination of these two scores places State Farm near the top of the list in customer satisfaction among the life insurance companies we rate.

State Farm is also not so agent-centric for such an established company. They offer you the option of calculating insurance, getting a quote, and even applying online.

State Farm is a member of the Marketplace Standards Association, an independent  organization that promotes ethical conduct.

Policies

State Farm life is able to offer a huge variety of flexible coverage options. Premium-wise you're going to pay a price for this reputation and level of service, and State Farm isn't the cheapest company out there. But in our opinion this is definitely one of those occasions where you get what you pay for. Some standard policy options include:

Guaranteed renewal on term plans up until age 95
Level premiums for whole life
Level premiums for initial period of term plan, increased premiums will never exceed what's stipulated in contract
Term convertible to permanent with guaranteed purchase option (no medical exam)
Return of premium
Mortgage term
Discounts for State Farm auto insurance

Sample State Farm policies:

Term Life

Select Term Life Insurance

Return of Premium Term Life Insurance

Affordable premiums are level for initial policy term

Policy premiums returned if policy period is outlived

10, 20, 30 years

Level premium payment

Guaranteed benefit

10, 20, 30 years

Coverage starts at $100,000

Coverage starts at $100,000

Guaranteed to renew up to age 95 years

Guaranteed to renew up to age 95 years

Convertible to permanent policy

 

 

 

Mortgage Term Life Insurance

5 Year Term Life Insurance

15 or 30 years

Up to $90,000 maximum coverage

50,000 minimum coverage

5 year renewable term up to age 85 (80 NY)

Decreasing term policy, death benefit decreases after 5 years

Premiums increase with age

Convertible to permanent policy

Convertible to permanent policy

 

Whole Life

Whole Life Insurance

Limited Pay Life

Level premiums to age 100

10, 15, 20 years premium payments

Access to cash value

Tax deferred growth of cash value

$100,000 in coverage

$100,000 in coverage

Eligible to earn dividends

Eligibility for dividends (not guaranteed)

 

Universal Life

Universal Life Insurance

Survivorship Universal Life Insurance

Flexible premium payments

Covers two people

Death benefits generally income tax free for beneficiaries

Death benefit is paid when the “last person” in the policy dies

Tax deferred cash values

Flexible premiums

Access to cash value

Death benefits generally income tax free for beneficiaries

 

Tax deferred cash values

 

 

Joint Universal Life Insurance

 

Covers two people

 

Death benefit is paid when the “first person” in the policy dies

 

Flexible premiums

 

Death benefits generally income tax free for beneficiaries

 

Tax deferred cash values

 

Comes with a range of riders

 

Can be customized

 

 

Additional Features

State Farm scores high here because they offer the most robust list of policy riders in the business. This allows customers incredible flexibility in customizing their policy to fit their specific needs. Term, whole and universal plans can enjoy add-ons for everything from disability income to funeral expenses. Of particular note is the company's flexible care benefit rider, which allows customers to access a portion of their policy's death benefit in the event of a chronic illness.

Plan Riders

Accidental Death
Flexible Care Benefit
Child
Disability Income
Funeral Expenses
Additional Insured
Estate Protection
Accelerated Benefits
Death Benefit Guarantee
Long Term Care Benefit

Help and Support

State Farm offers unparalleled support among life insurance entities. The company has customer care reps available by phone 24/7. Round the clock support is also available when managing accounts online. The company is also accessible through email and social media.

Online Presence

Unique among the more traditional/older insurance companies, State Farm has an extensive online presence featuring a robust searchable learning center containing news, articles, videos, columns, and advice for beginners through experts. Mobile apps for iPhone and Android are also available. 

Additionally, determining the amount of life insurance coverage you'll need is incredibly easy (and fun) with their online life insurance calculator. You can then get quotes, apply for insurance and manage your account all online. 

State Farm Life Insurance

State Farm Life Insurance ranks highly on our list because of their history, reliability, reputation, customer service - but primarily because of their huge amount of flexible plans and fantastic rider options that allow for maximum customization. Great policy features including access to cash value, guaranteed death benefits, accelerated death benefits and optional coverage items are definitely marks in their column as well.

The only downside we can see is that premiums tend to be on the pricier side when compared to other similarly featured offers from other life insurance providers. Charges and fees are also a concern. But as we said above, you get what you pay for. Everyone knows State Farm is a rock solid company with an outstanding reputation you can depend upon.

 


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