State Farm Life Insurance Review

Life insurance is the best way to ensure your family does not struggle with unplanned bills and expenses in the event of your death. This insurance helps ease your family’s financial burdens in a very stressful time. There were nearly 6,000 life insurance companies in the U.S. in 2016. State Farm sets itself apart from other life insurance companies with a strong emphasis on customer service. Consumer research firm J.D. Power awarded State Farm Insurance for providing the highest customer satisfaction every year for the past four years. Additionally, we chose State Farm Life Insurance for best customer service in our guide about the best life insurance companies.

State Farm is a financial service and insurance company, ranking thirty-fifth on the 2016 Fortune 500 list with revenues of over $75 billion. The company offers over 100 financial products and services, including several types of life insurance. State Farm Life Insurance Company offers term, whole, universal, and variable universal life insurance to clients throughout most of the United States. State Farm meets their client’s needs with in-person service through their network of agents as well as the convenience of telephone and online service.

Pros
  • Offers Term, Whole, Universal, and Variable Universal policies
  • Available in most states
  • Highly respected company
  • Good customer service ratings
Cons
  • Unavailable in Massachusetts
  • No guarantee against loss of value on some plans

State Farm Life Insurance Products

State Farm offers term, whole, universal, and variable universal life insurance policies. This variety of life insurance allows clients to find the policy type that best suits their needs within a single company

State Farm Term Life Insurance

Term insurance is the least expensive life insurance you can buy and coverage continues until the policy term lapses, usually from 10 to 30 years, as long as you pay premiums. With pure term life insurance, there is no cash payout at the end of the policy term, although State Farm has an alternative, discussed below. State Farm offers four types of term life insurance policies, Select Term, Return of Premium Term, Mortgage Term Life and Instant Answer Term insurance.

Select Term and Return of Premium Term policies guarantee benefits for the entire term rather than decreasing with age. You can keep the policy after the term expires, but premiums will increase annually. You can convert either policy to permanent life insurance until you reach age 75, no matter what your health. You can get coverage with either plan starting at $100,000 in coverage and up.

Term Life Insurance Benefits

  • Loss of Income- Help provide for your family’s loss of income
  • Debts- Help with short-term debts
  • Coverage for Children- Additional insurance for children
  • Long-term Protection- Help your family pay off mortgage and education expenses

You can buy a State Farm Select Term life insurance with a 10, 20 or 30 term and can renew until you turn 95. State Farm’s Return of Premium life insurance plan is available for a term of 20 or 30 years, and if you live past the term, you receive a refund of the premiums paid over the years. Both Select Term and Return of Premium life insurance have customizable options, such as a rider to add a child or another adult to your policy.

As the name implies, Mortgage Term Life pays your home mortgage off in the event of your death. The insurance is available for 15 or 30 years, and the death benefit decreases annually after the first five years, as your mortgage balance will.

State Farm Instant Answer Term Insurance lets you buy a $50,000 term life insurance policy the same day you apply. No medical exam is required, but you must be between the ages of 16 and 45. You can buy coverage for 10 years or to age 50, whichever is later.

State Farm Whole Life Insurance

life insurance

Source: Getty

Whole life insurance gains tax-deferred value over time with dividends, and you can take cash out of the balance as a loan. As long you pay premiums, the policy holds a cash value at the end of the term, and you will have coverage for life. State Farm offers whole life policies with multiple options for premium terms. Policies can be paid with a single premium payment, premiums to 100 (years old) plan, or level payments for 10, 15, or 20 years with the Limited Pay plans.

Any outstanding loans on the policy reduce the cash value and the death benefit. As with most whole life plans, there are no guaranteed dividends. Death benefits are usually tax-free to beneficiaries.

State Farm Universal Life Insurance

Universal life insurance is a hybrid of life insurance and an investment account. Universal life insurance policies do not guarantee a return on investment but fluctuate with the stock market. Portfolio management expenses get deducted from your monthly premium, then the remaining funds go into your account after paying any other costs. You can withdraw cash from the policy or take out a loan. State Farm Universal Life insurance remains in effect as long as there is enough cash in the account to cover monthly deductions.

State Farm offers universal life insurance that allows you to choose your preferred premium rate within policy minimums, has a death benefit, offers tax-deferred status on cash value growth, and the ability to use the cash value for your expenses.

Universal Life Insurance Features

  • Flexibility- You decided the amount of life insurance you want
  • Death Benefit- Life insurance proceeds are tax-free
  • Tax Deferred- Cash value growth is tax deferred
  • Access to Cash Value- Cash value can be accessed to help with expenses

State Farm Survivorship Universal Life Insurance covers two people under the same policy. The death benefit pays out when the last person covered by the plan dies. Survivorship Universal has the same features as standard universal life insurance but is often less expensive compared to two separate policies. This type of plan is often attractive in a variety of situations, such as parents who do not need life insurance for themselves but want to provide for their children when both parents die.

State Farm also offers Joint Universal life insurance. Like Survivorship Universal life, this policy covers two people. However, Joint Universal life insurance pays the death benefit as soon as one insured dies. Joint Universal life insurance has the same benefits as the other universal life insurance policies with an option for the surviving person to purchase a second policy. This plan also has a wide variety of riders available to fully customize your coverage.

Sample State Farm Life Insurance Cost

The table below shows sample life insurance premiums for a 25-year-old female living in Illinois, with excellent health. Annual rates are available.

State Farm Life Insurance Quote
Premiums
Policy Features Term Life Whole Life Universal Life
Coverage, Term and Rate Select Term $250,000/30 yrs, $20.23 per month
Return of Premium $250,000/30 yrs, $40.25 per month
Limited Pay $100,000/15 yrs, $112.58 per month
Single Premium $100,000 of coverage, $19,799/pay once
Given the flexibility of Universal Life policies,
speak to a State Farm agent for a quote
Guar-
anteed Death Benefit*
Yes Yes No
Cash Value Some under Return on Premium Option Yes Yes**
Lifetime Coverage* No Yes Yes
Flexible Premiums No No Yes
Dividends No Eligible No

*Dependent on policy being in good standing and fully funded
**Provided cash value has not been exhausted through deductions

State Farm Complaints

State Farm received J.D. Power’s Highest Customer Satisfaction among Life Insurance Providers for 2017, scoring a perfect five out of five in every category. State Farm received this award four years in a row. The entire State Farm company with all financial product lines has a B+ rating with the Better Business Bureau, and State Farm has had a BBB file since 1931. State Farm life insurance rates four out of five stars on ConsumerAffairs, however, many positive reviews from customers who have had no problems with the company felt the premiums were somewhat high, but they wouldn’t change companies because of the good customer service they received.

life insurance on computer

Source: Getty

State Farm Product-related Q&A

  • What affects life insurance premium costs?
    Life insurance premiums are based on a variety of factors that help determine the risk to the insurer. These characteristics include age, sex, height, health conditions, your occupation, whether or not you smoke, and the type of policy purchased.

  • Are there any tax benefits to life insurance?
    Unlike standard inheritances, death benefits from life insurance policies are generally tax-free to your beneficiaries. Some plans may also grow a cash value that is tax-deferred.

  • What is a beneficiary?
    A beneficiary is a person or people you designate to receive the proceeds of your life insurance policy when you die. To prevent delays for your beneficiaries, correctly filling out the designation forms is vital.

  • What is face amount?
    The face amount is the amount of the death benefit the policy pays without any other revenues or values, such as cash value or dividends.

  • Can I change my beneficiary?
    Yes, you can change your beneficiary on your life insurance policy. State Farm uses a request letter form to process policy changes. You will need your policy number, the name of the beneficiary or beneficiaries, your relationship to the beneficiary or beneficiaries, and you must sign the form.

  • What is permanent life insurance?
    Permanent life insurance is a policy that is active for your entire lifetime, provided payments continue. Whole life, universal life, and variable life insurance fall into this category. Unlike term life insurance, it does not have a set term after which the policy ends and must be renewed. Permanent life insurance has a cash value feature in addition to the death benefit.

Conclusion

With an extensive network, excellent customer service awards, and their comprehensive product line, State Farm Life Insurance is a good company to check out if you’re shopping for life insurance. It has an informative website, mobile apps for iOS and Android smartphones and, if you prefer to speak with someone in person, you can find State Farm agents across 49 states states.

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