State Farm life insurance review 2024
“Verified by an expert” means that this article has been thoroughly reviewed and evaluated for accuracy.
“Verified by an expert” means that this article has been thoroughly reviewed and evaluated for accuracy.
BLUEPRINT
Published 6:00 a.m. UTC Feb. 26, 2024
Editorial Note: Blueprint may earn a commission from affiliate partner links featured here on our site. This commission does not influence our editors' opinions or evaluations. Please view our full advertiser disclosure policy.
Pros
- Best whole life insurance among insurers we analyzed.
- Reliable policy illustrations for accurate understanding of cash value.
- Highly customizable policies.
- Good options for parents wanting to start coverage for children early.
- Bundle discounts with other State Farm policies.
Cons
- Must apply in person with an agent.
- Medical exams required for most policies.
- New policies may not be available in Massachusetts and Rhode Island.
- High internal costs for some policies.
Why trust our life insurance experts
Our team of experts evaluates hundreds of insurance products and analyzes thousands of data points to help you find the best product for your situation. We use a data-driven methodology to determine each rating. Advertisers do not influence our editorial content. You can read more about our methodology below.
- 3,000+ whole life insurance policies evaluated.
- 13 million+ life insurance policy features analyzed.
- 5 levels of fact-checking.
About State Farm life insurance
Though State Farm got its start as an automobile insurer in 1922, the company quickly expanded, founding the State Farm Life Insurance Company in 1929. The life insurance arm of State Farm offers a full range of life insurance options, including term, whole and universal life insurance policies.
State Farm will only issue life insurance policies if you apply in person with an agent. It may be worth the effort: State Farm’s policies are highly customizable and the company is known for its customer service and financial strength.
Life insurance policies offered by State Farm
State Farm offers three core life insurance products: term, whole and universal. Within each product type are several options to choose from.
State Farm term life insurance options
State Farm offers a standard term life insurance option, but you can also apply for special policies that may be more suited to your needs.
- Select term life insurance: State Farm offers term life insurance in 10-, 20- and 30-year terms. Ten-year terms are available for anyone ages 18 to 75, but 20- and 30-year policies are capped at ages 65 and 45 respectively. You can renew policies until you’re 95, but your premium will increase. Coverage amounts start at $100,000.
- Return of premium life insurance: Though true term life insurance doesn’t include a cash value, State Farm offers a unique option: term coverage with a cash value you can borrow against. Under this policy, if you’re alive at the end of the 20- or 30-year term, State Farm repays your premiums (as long as you’ve always made on-time payments). Coverage amounts start at $100,000.
- Instant answer term insurance: Feeling impatient? You can get $50,000 of coverage for 10 years or until you reach 50, whichever is longer. Though this is billed as the instant option, you’ll still have to visit an agent in person to get approved (no online approval process), but you can expect a same-day decision. The bright side? There’s no medical exam required.
State Farm whole life insurance options
State Farm offers some of the best whole life insurance available, with major flexibility in how you pay your premiums and the ability to earn dividends. Here’s what you can choose from:
- Whole life insurance: State Farm’s standard whole life insurance policy lasts a lifetime, and premiums never change. The policy builds a cash value that you can borrow against while you’re alive.
- Limited pay whole life insurance: Rather than make premium payments on the policy until you pass away, you’ll pay off the policy in 10, 15 or 20 years. The shorter the policy payoff, the higher the premiums will be. After it’s paid off, you can enjoy a lifetime of benefits. This policy also accumulates cash value and earns dividends, making it a good option when you’re young or if you want to get a policy for your children.
- Single premium whole life insurance: With this policy, you pay a single, one-time premium in exchange for coverage. State Farm’s lowest available premium face value is $15,000, and the policy is available to people aged 80 or under. It can be issued for individuals ages 0 to 80, making it a good option for parents shopping for a child’s whole life insurance policy.
- Guaranteed issue final expense insurance: Available to people between 50 and 80, this plan offers $10,000 to $15,000 in coverage. It is designed to cover burial expenses after you pass away, but your beneficiaries can spend the money as they see fit. The final expense plan builds cash value and can earn dividends. This product is not available in New York, but residents of that state have access to a similar product with $10,000 in coverage.
State Farm universal life insurance options
Universal life insurance is a more flexible form of permanent life insurance — you can raise and lower your death benefits and premiums as you see fit over time. State Farm offers a few universal life insurance options:
- Universal life insurance: This permanent life insurance policy is flexible and available to individuals who are 85 or younger. If you’re 17 or under or 55 to 85, you can get coverage starting at $25,000. If you’re somewhere in the middle, death benefits start at $50,000. This policy builds cash value that you can borrow against.
- Survivorship universal life insurance: This plan is designed for two people, such as spouses, and the death benefit pays out when the second insured individual passes away. This policy is available to people between the ages of 18 and 90 (78 in California) and offers coverage starting at $250,000 in coverage. It could be helpful with funding special-needs trusts, preserving estates, charitable giving and business transition planning.
- Joint universal life insurance: This policy also covers two people, but it pays out when the first insured person dies. This helps the surviving spouse manage continued living expenses on their own. Coverage amounts start at $100,000.
State Farm life insurance reviews
State Farm has the best whole life insurance among the insurers we evaluated. It also offers term and universal life insurance policies and maintains a Superior rating from AM Best, reflecting its ability to pay out claims.
Based on our analysis of life insurance companies, State Farm’s permanent life insurance policies are cost-competitive and it has some of the most reliable policy illustrations (only Northwestern Mutual exceeds State Farm in this area). These illustrations are important when purchasing a permanent life insurance policy, as the illustrations demonstrate how the cash value may accumulate.
State Farm life insurance has a low level of customer complaints, according to data from the National Association of Insurance Commissioners (NAIC).
If you’re considering State Farm for your life insurance needs, get and compare its rates and coverage to those offered by at least two other insurers, ensuring that the coverage amount and type are the same for all quotes. You can also speak with friends and family who may carry coverage through this insurer and can provide a personal State Farm life insurance review.
Methodology
To determine the best whole life insurance companies, our life insurance experts evaluated data provided by Veralytic, an independent publisher of life insurance research and analytics.
Each life insurance company included in our evaluation had the opportunity to earn up to 100 points, based on the following factors.
Cost competitiveness of cash value policies: 35 points. We looked at internal policy costs, such as administrative fees and policy charges, to determine the competitiveness of permanent life insurance policies.
Historical performance: 25 points. Our analysis took into account the historical performance of the life insurance company’s investments to determine how an insurance company’s performance and therefore cash growth potential compared to its competitors.
Reliability of policy illustrations: 20 points. We evaluated the accuracy of each life insurance company’s policy illustration, a document that shows projected cash value growth, to determine which companies provide the most reliable outlooks.
Financial strength: 10 points. There are four major rating agencies — AM Best, Fitch, Moody’s and Standard and Poor’s — that evaluate an insurer’s financial strength, a factor that indicates an insurer’s ability to pay out a claim years from now. We considered this to account for the likelihood that an insurance company can meet claim obligations.
Cash value: 10 points. Cash value policies grow at different rates, and we factored the liquidity of a cash value policy into our analysis. Some policies have a cash value that grows faster in the early years. Others have slower cash value growth in the early years, and policyholders must wait a significant period before having access to a sizable cash value. Whole life insurance policies with cash value that grows faster in the early years received more points.
State Farm life insurance review FAQs
You can get a new State Farm life insurance policy in every state except Massachusetts and Rhode Island. You can’t apply online — you’ll need to work with an agent to apply for life insurance with State Farm.
State Farms offers several cash value life insurance policies from which you can borrow money. Generally speaking, this option is limited to permanent life insurance policies, such as whole life and universal life insurance. However, State Farm offers a unique term life policy with a cash value account.
Keep in mind that you’ll pay interest when you take out a cash-value loan, and if you pass away before repaying it, your beneficiary’s death benefit will be decreased.
State Farm’s traditional life insurance requires a medical exam, but eligible applicants may be able to turn to State Farm for no-exam life insurance. You can apply for State Farm’s instant answer term life insurance option to skip the medical exam. You’ll still have to fill out a medical questionnaire, and such plans provide just $50,000 in coverage.
State Farm does not indicate an estimated timeline for life insurance payouts, but the insurer says that it has an “efficient, organized life insurance claims process” to move swiftly and make things easier for those who have lost a loved one.
For a speedy payout through State Farm, life insurance beneficiaries should notify the insurer of the death as soon as possible and ensure all necessary forms are filed. It’s helpful to have key information on hand, like the insured person’s name, date of birth and state of residence, as well as the life insurance policy number if you know it.
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.
Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.
