State Farm is one of the largest insurance companies in the world. They started almost 100 years ago by Illinois farmer G.J. Mercherle. He sold his first auto insurance policy for $11.17. They serve 82.9 million policies today. They are mainly an auto and homeowner insurer, but they have life insurance as well as many other insurance and financial products.
- Pros and Cons
- Products Offered by State Farm Life Insurance: 90/100
- Financial Strength Rating of State Farm Life Insurance: 100/100
- Customer Satisfaction Rating of State Farm Life Insurance: 90/100
- Consumer Complaints Rating of State Farm Life Insurance: 80/100
- Digital Experience Rating of State Farm Life Insurance: 90/100
Pros and Cons
|– You can buy some policies online|
– Wide range of insurance products
– Claims can be started online
– If you’re interested in bundling, there are discounts
– Competitive pricing
– Excellent ratings for life insurance
|– Not available in MA|
– No Variable or Indexed universal life options available
– Customer service has no email—you have to call
– Changes to your policy must be made either by phone or through an agent
Products Offered by State Farm Life Insurance
State farm offers dozens of insurance and financial products. For life insurance alone, they offer ten different products.
State Farm Term Insurance Product:
State Farm offers three term life insurance products; Select Term Life, Return of Premium Term Life, and Instant Answer Term life.
- Select Term is available in terms 10, 20, or 30 years and is renewable up to age 95, with coverage starting at $100,000.
- Return of premium is similar to Select Term, with terms of 20 or 30 years. If you outlive the length of the term, you receive all the premiums back. However, this makes it more expensive than Select Term insurance.
- Instant Answer is supposed to be used as final expense insurance. As such, it’s available for up to $50,000 worth of coverage. You can get an immediate answer, but you have to go to a State Farm office to do it. There is no medical exam required. If they could present this insurance online, and get people approved online, they would probably sell more policies.
State Farm Whole Life Insurance
State Farm offers three types of whole life insurance policies: Whole life, Limited Pay Life, Single Premium Life, and Final Expense Life.
- Whole life policies build cash value. They offer level premiums for the lifetime of the policy. You can pay monthly or annually.
- Limited Pay Life: With this policy, you can choose how long you pay premiums—ten, fifteen or twenty years. The policy still lasts your whole life.
- Single Premium Life: You can also pay your premium in one lump sum, called Single Premium life insurance. All these three types of whole life policies allow policy holders to earn dividend.
- Final Expense: State Farm also offers final expense whole life insurance with $10,000 worth of coverage, or just enough to cover the cost of the funeral.
State Farm Universal Life Insurance
Universal life insurance is a permanent type of insurance that offers the flexibility to raise or lower your coverage and your premiums. These policies also build cash value. You can get $25,000 worth of coverage if you’re ages 0-19 or 55 to 85 and up to $50,000 if you’re any age in between. State Farm offers two types of universal life insurance products:
- Survivorship Universal Life provides coverage for two people, with the death benefit being paid after the second person dies. It’s available at amounts starting at $250,000.
- Joint Universal Life Insurance also covers two people, but the death benefit is paid upon the death of the first person. It’s available in amounts starting at $100,000.
There are a number of riders that can be added to your Universal Life policy:
- Level term
- Children’s term. Learn more about life insurance for children
- Guaranteed insurability. Learn more about guaranteed insurability in life insurance
- Waiver of monthly deduction for disability
- Flexible care benefit
- Payor insurance (can be added to a whole life policy)
However, State Farm doesn’t offer the three most popular universal life insurance products: guaranteed universal life which is a good product focusing on guaranteed death benefits at reasonable price; indexed universal life policy which allows the cash value account’s growth tied to popular indexes like S&P 500; and variable universal life insurance policy which allows policy holders to invest the cash value account just like an investment account, yet still enjoy enjoy tax-free cash withdrawal. Learn more about the benefits of growing the cash value account with tax benefits.
Should you be interested in other types of products from State Farm, they also offer auto, home, condo, renters, property, health, disability, liability, and small business insurance products. Other investment-related products such as mutual funds, annuities, educational savings, and retirement planning are also available with State Farm.
>>Learn More: How to Use Life Insurance in Retirement Planning – A Case Study
As you can see, State Farm offers a lot of different insurance and financial products and offers some flexibility within those products.
The only caveat is that if you’re interested in other insurance products, State Farm’s ratings in those areas are not as strong.
Financial Strength Rating of State Farm Life Insurance
State Farm earns the highest financial strength rating you can get from AM Best, which is an A++. This means they have a superior ability to meet their ongoing insurance obligations.
Customer Satisfaction Rating of State Farm Life Insurance
State Farm ranks 2nd in J.D. Power’s 2019 Life insurance study, behind only Northwestern Mutual. They scored 808 points out of 1,000 which is excellent, considering the median average score was only 761.
Here’s how they did in the individual categories:
- Product Offerings: 5/5
- Price: 4/5
- Statements: 4/5
- Interaction: 5/5
- Communication: 5/5
- Application and Orientation: 3/5
Except for application and orientation (how customers rate the ease and speed of the application process) all of their scores were at least above average. If they had scored 4/5 on Application, they would have tied for first place.
Consumer Complaints Rating of State Farm Life Insurance
The NAIC (National Association of Insurance Commissioners) gives State Farm Life insurance a score of 1.04 for group life insurance and .16 for individual life insurance. The median average is a score of 1.0, so for individual life State Farm has far fewer complaints than you would expect and for group life they have about an average number of complaints.
The BBB (Better Business Bureau) gives State Farm an A+ even though they’re not accredited. There are 1,374 complaints listed on the site in the past three years. This is quite a few, but they are a huge company. If you’re interested in life insurance, most of the complaints are centered around their home and auto insurance. Make sure you read your policy.
Digital Experience Rating of State Farm Life Insurance
You can get a quote online for life insurance, at least for some policies. For a 30-year old woman living in CT in excellent health (they give you a chart so you can tell what category you fall into) they gave us these quotes for $500,000 worth of coverage:
When it comes time to purchase the policy, you can either create an account or be contacted by an agent. Some policies you can purchase online.
The website is pretty easy to navigate. You can manage your policy, pay your bill or file a claim online.
There is also a mobile app, through which you can view your policy, file a claim, get a quote, view the status of a claim or connect with your agent.
State Farm is a large insurance company with a wide range of products and excellent ratings. Life insurance is especially highly ranked. It’s worth it to get a quote from them.
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