State Farm Life Insurance Review [Rates, Pros & Cons]

Disclaimer: We are not State Farm Life Insurance Company. Good Life Protection is considered an independent rating agency that delivers unbiased and factual data to consumers to help them determine if State Farm is the best company to choose for their life insurance coverage.

Free-Quotes provided on this page are independent rates for more than 50 of the top-rated life companies in the United States.

The quotes are not being provided directly by State Farm Insurance Company.

This State Farm Life Insurance review is approximately a 4-min read from start to finish.

Throughout our review, we will cover important components of State Farm Life Insurance including potential rates you may pay, underwriting guidelines and the drawbacks of choosing them for coverage.

Here are the details you should know.

Our State Farm Life Insurance Review

Of the thousands of life insurance companies operating in the United States, many would be surprised to discover that State Farm issues some of the highest annual life insurance policy counts.

After all, State Farm is widely known for its automobile and home insurance.

Is State Farm good for life insurance? While State Farm’s auto and home insurance rates are often highly competitive, State Farm life insurance rates can be expensive compared to core life insurance companies.

We will cover why we believe State Farm is not good for life insurance further in our review. If you are considering purchasing State Farm life insurance, do not make any final decisions before reading this State Farm life insurance review.

However, we always recommend that if you are trying to save time that you should stick to comparing rates and quotes with all life insurance companies.

State Farm Life Insurance History

State Farm has been there like a good neighbor since its founding in 1922 by retired farmer and insurance salesman George Jacob “G.J.” Mecherle. Mercherle’s vision was simple.

He believed that an insurance company should operate fairly and do the right thing for its customers. It is these founding principles that guide State Farm even to this day.

State Farm originally started as a single-line auto insurance company but grew over time into the insurance giant that it is today.

Now offering over 100 products and services in five different lines of business, State Farm, headquartered in Bloomington, IL,  is currently ranked 36 on the Fortune 500 list of largest companies and insures more cars and homes than any other insurer in the United States.

As of December 2017, State Farm has a whopping 70,000 employees and 19,000 agents.

State Farm is currently structured as a mutual company, which means that policyholders own the company, not stockholders.

State Farm only allows its career agent force to sell its products.

This type of agent structure is sometimes referred to as a captive agent since they can only represent one company, unlike an independent agent that acts as a broker to multiple insurance companies.

State Farm Ratings and Financial Strength

A.M. Best- A++ (Superior)

Standard and Poor’s (AA)

State Farm has a rock-solid balance sheet.

If you are looking for a second opinion Standard and Poor’s awarded State Farm an AA rating, which is investment grade as well.

When the time comes to file a claim, you want to know that the insurance company will have the money available to payout.

State Farm’s financials are in elite shape indicating that they have ample capital to pay on their claims.

State Farm receives an A- from the Better Business Bureau (BBB), which is one of their top ratings; although, not the best.

Any business the size of State Farm is bound to have customer service issues that need to be resolved.

State Farm has done a good job of addressing customer concerns in a timely manner.

State Farm Life Insurance Solutions

State Farm is a legend in the automobile and home insurance markets, but how do they stack up in the life insurance market?

Our State Farm life insurance review will focus on their life insurance products since that is our area of expertise.

State Farm Term Life Insurance

State Farm’s term life insurance is straightforward.

There is no cash value or complex investments, just pure death benefit protection.

Term life insurance can help replace lost income, help pay for your child’s college education, or pay off your mortgage balance.

State Farm Term (Full Underwriting)

State Farm’s term life insurance comes in term durations of 10, 20, or 30-year durations.

Surprisingly, State Farm does not offer a 15-year term option, which is a popular option that most life insurance companies offer.

State Farm’s Term life insurance coverage starts at $100,000 death benefits.

Premiums remain level for the term duration that you select, and you have the option to pay either monthly or annually.

You can continue your coverage beyond the level premium period and switch to an annually renewable charge until age 95.

However, most people choose to either replace the term policy or convert it to a permanent policy since the price will increase annually at a substantial rate.

State Farm’s term policy has a conversion option built-in at no additional premium.

When you convert your term policy, you can exchange the temporary term policy with a permanent life insurance policy no matter what condition your health is in.

Underwriting for State Farm term insurance is your standard medical underwriting.

You will be required to answer some basic health questions, complete a medical exam, and the life insurance company will likely order your medical records.

The entire process takes 4-6 months on average.

State Farm also offers your standard array of optional riders to further customize your term policy.

You can add a children’s term rider for $20,000 of coverage for each eligible child in your family.

You can also add on a waiver of premium disability options that will waive your life insurance premiums if you become totally disabled.

State Farm Return of Premium Term Life Insurance

State Farm offers a return of premium term life insurance option as well.

As the name suggests, a return of premium life insurance policy will pay you all your premiums back if you outlive the term.

State Farm return of premium term life insurance coverage starts at $100,000 death benefits and requires full underwriting like State Farm’s term.

The cost of a return of premium policy is approximately 2-3 times greater than a regular term life option making it more a niche solution.

Our agency sees the return of premium term life popular with a particular segment of the population.

People who are mandated to carry life insurance, such as in divorce decrees, may want to do a return of premium to recuperate their premium payments once the mandate is satisfied.

Also, return of premium life insurance can be a convenient injection of cash that can pay things like educations expenses when the death benefit is no longer needed.

State Farm No-exam Term Insurance

Can you get State Farm life insurance with no medical exam? State Farm offers an express issue term insurance option that does not require a medical exam up to $50,000 of death benefits until age 50 or 10 years, whichever is longer. It is great that State Farm offers a no-exam term life insurance option to its policyholders.

However, if you want to skip the exam, there are better policies available from other companies.

Companies like Sagicor Life are absolutely crushing it right now with their no-exam accelerated underwriting program that allows you to purchase up to $500,000 of term life insurance death benefit without the hassle of a medical exam.

Additionally, life insurance companies like Phoenix Life offer no-exam term life insurance with living benefits for critical and chronic illness; something that State Farm’s no-exam term life policy does not include.

State Farm Whole Life Insurance

State Farm whole life insurance allows you to prepare for the unexpected but inevitable.

Whole life’s death benefit covers you for your entire life and will be there when your family needs it the most.

Whole life can be used for family protection just like term life insurance.

It can replace your income, cover your mortgage, and provide educational funds.

However, where term life insurance ends, whole life insurance keeps going to provide funds for things like your burial or to leave a legacy.

Whole life insurance provides ample guarantees.

Your premiums are guaranteed never to go up, you can never outlive your death benefit, and you are guaranteed a certain level of cash growth.

Additionally, many of State Farm’s whole life insurance policies are eligible to receive non-guaranteed dividends.

Mutual insurers often will pay dividends to their whole life insurance purposes from the annual profits of the insurance company.

These dividends are not guaranteed, but State Farm has reliably paid dividends to their whole life policyholders for years.

Dividends can be reinvested into the whole life policy to increase both the death benefit and cash value.

The cash value grows tax-deferred in a whole life policy, and you can borrow against your State Farm life insurance policy through tax-free loans in a pinch.

State Farm offers a number of payment options for their whole life insurance policies if you do not wish to have a lifetime payment.

Paying off the policy early will increase the monthly premium, but it will eliminate your bill over time, which can be useful in retirement when most people are on a limited budget.

State Farm Whole Life Payment Options:

  • Lifetime pay
  • 10-pay (10 years)
  • 15-pay (15 years)
  • 20-pay (20 years)
  • Single-Premium (modified endowment contract)

State Farm will allow you to customize your whole life policy further through optional riders.

Like State Farm’s term life insurance, you can add a waiver of premium disability rider to eliminate your premiums if you become totally disabled.

State Farm also offers a guaranteed insurability option (GOI).

The GIO rider allows you to purchase additional amounts of life insurance death benefit on specific option dates without a medical exam at standard rates.

This allows you the flexibility to modify your policy as your life changes; for example, you get married or have children.

State Farm Universal Life

State Farm universal life insurance is an alternative permanent life insurance policy to whole life insurance.

Universal life has more flexible terms compared to whole life, but that flexibility is at the cost of some of the guarantees that whole life has.

Universal life insurance has a savings account where a portion of your premiums is deposited to earn interest.

This cash value grows tax-deferred just like whole life, but the investment return is not locked in.

If the policy’s cash value does not experience favorable returns, the policy could run out of cash.

Universal life insurance can be used for family protection, pay off debts, and educational needs.

However, universal life insurance really shines in estate planning, special needs planning, and business planning.

With universal life, you can pick your premiums.

You can pay as much or as little as you want into the policy.

However, if you run the policy super lean, your coverage could potentially lapse due to underfunding.

State Farm also lets you customize your policy further by adding on an optional flexible care benefit rider that allows you to advanced the death benefit while you are still alive if you are diagnosed with a chronic illness.

State Farm also offers Survivorship Universal Life Insurance that covers the life of two people.

This type of policy is also known as a second-to-die policy since the death benefit pays after the death of the second person.

This is a special type of universal life insurance that is primarily used in estate planning cases.

It is a cost-effective way of creating a cash estate after the death of two people.

You can use the death benefit proceeds to even out illiquid assets, such as land or businesses when you have multiple heirs or pay estate and inheritance taxes.

State Farm also has a Joint Universal Life Insurance option.

The joint-life policy is similar to the survivorship policy in that it covers two lives.

However, the death benefit will pay on the death of the first insured.

These first-to-die life insurance policies are somewhat rare today but can be less expensive than purchasing two individual whole life policies in some cases.

Other State Farm Insurance Solutions

Outside of life, auto, and home insurance, State Farm does provide additional products and services to their policyholders.

State Farm offers business insurance for small business owners such as business continuation insurance and disability insurance.

When our agency does an insurance review for our clients, the one area that always seems to be lacking is disability coverage.

People understand the value of replacing their income if they pass away, but what happens if you become sick or injured and are unable to work?

State Farm offers a solution for that as well.

List of State Farm Services:

  • Automobile insurance
  • Motorcycle insurance
  • Sport and leisure vehicle insurance
  • Home and property insurance
  • Life insurance
  • Disability insurance
  • Supplemental health insurance
  • Liability insurance
  • Banking services
  • Mutual funds

How to Apply for State Farm Life Insurance?

So what are the State Farm Life Insurance pros and cons? State Farm operates under a career agency system. State Farm agents are captive, which means that they can only represent State Farm and sell State Farm products.

This means that the only place you can purchase State Farm life insurance is at a local State Farm agency or by calling the state farm life insurance phone number.

 State Farm’s rates are competitive on paper. However, their underwriting can be stringent, which means it is more difficult to qualify for those rates.

Remember that State Farm’s core business is as an automobile and home insurance provider, not life insurance.

If you are in excellent health and are OK taking a medical exam, State Farm is an OK option as long as you want below $50,000 of death benefits.

You may receive a bundle discount on your auto and home insurance by having a State Farm policy, which may soften the blow of higher rates.

However, if you have a pre-existing health condition, you would be better off working with an independent agent who brokers multiple companies.

Every life insurance company has different opinions on rates and underwriting specific medical impairments.

Also, if you want no-exam coverage, there are plenty of better options available as we discussed earlier.

State Farm Life Insurance Quote Comparison

We have included some sample State Farm term life insurance quotes listed on their website for your comparison.

Please note that you need to qualify for these rates based on your health, lifestyle, and other factors.

As you can see from the chart below, State Farm might not be the best company if you are looking for the rock-bottom lowest life insurance rates.

State Farm Life Insurance Rate Comparison:

10-year Term15-year Term20-year Term30-year Term
State Farm Rates$15.02N/A$15.22$19.14
Competitor Rates$8.55$9.62$11.54$15.50

**Please note that these quotes are for the female age 25 preferred best non-tobacco health class and paid monthly with Death Benefit of $250,000.

Final Thoughts: Is State Farm Life Insurance Worth It?

State Farm is a great company, but it is hard to be great at everything.

While State Farm is the leader in the home and automobile insurance markets, State Farm life insurance can be expensive.

It may be convenient to purchase your life insurance from State Farm if you already have other insurance lines with them, but you likely can get a better deal elsewhere if you look.

We always suggest getting the quotes of multiple life insurance companies, especially if you have a pre-existing medical condition or do not want to take a medical exam.

If you want to compare rates, you can request a Life Insurance quote on our website or give one of our agents a call.

Our veteran agents can shop in the marketplace in order to match you with the best company.


Resources: State Farm