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Everything you need to know about State Farm life insurance

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Term, whole and universal life insurance policies backed by a provider ranked number one for customer satisfaction — four years in a row.

Established in 1922, State Farm began offering auto insurance for farmers, hence its name. Today it offers fire and life insurance among its many other financial products. Ranked 33rd on the 2017 Fortune 500, State Farm has 19,000 agents around the country and prides itself on developing relationships with its customers.

You may notice the negativity on life insurance reviews, but it’s important to remember it’s far more likely that customers complain about a negative experience than to take the time to write a positive review. State Farm is another story — according to J.D. Power’s annual life insurance study, the company is ranked number one for customer satisfaction, with hundreds of positive online reviews to back it up.

Keeping reading to find out why customers love this provider in this comprehensive State Farm life insurance review.

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What is State Farm known for?

The parent company, State Farm Mutual Automobile Insurance Company, is best known for — you guessed it — auto insurance. However, it uses its many subsidiaries to sell a variety of other financial products. Its widely recognized tri-oval logo subtly represents auto, fire and life insurance.

Pros and cons

State Farm is best known for its industry leading levels of customer satisfaction, but it does have its shortcomings. Here are some pros and cons of State Farm life insurance:

Pros

  • Financial stability. State Farm received an A++ rating from A.M. Best, the most trustworthy ratings agency for the insurance industry. This is the highest possible rating, meaning there’s no risk of this provider being unable to pay its claims.
  • Great customer service. This provider has some of the best customer service in the industry, even offering 24/7 assistance via phone by calling 800-782-8332.
  • Strong product lineup. State Farm offers term, whole and universal life insurance policies with a range of different plans and options under each category.

Cons

  • Strict underwriting. State Farm has some of the most strict underwriting guidelines in the industry. Those with pre-existing conditions, subpar driving records or even moderately high cholesterol levels may not be approved.
  • No variable universal life insurance. Universal life insurance is often the primary investment vehicle for many customers, so flexibility is an important factor. State Farm doesn’t offer variable universal life insurance, meaning investment options are limited.
  • High rates. Since State Farm’s underwriting guidelines are so strict, its best rate class is nearly unattainable. Unless you’re in incredible shape and have a clean driving record and family history, it’s likely you’ll find better rates elsewhere.

What life insurance coverage does State Farm offer?

Despite its massive size and extensive network of agents, State Farm keeps it simple with three types of life insurance. Term, whole and universal life insurance policies are available with additional riders and flexible options to get you the coverage you need. The company did offer variable life insurance products in the past, but the lineup was discontinued in 2008. Here’s what coverage you can expect from State Farm life insurance:

Term life insurance is State Farm’s most affordable and straightforward type of policy. These plans offer a predetermined amount of coverage for a set period of time, along with monthly payments that don’t change for the life of your policy. Policy coverage is available in 10-, 15-, 20- and 30-year terms and provides a guaranteed benefit payout starting at $50,000. After your policy expires, either pay more for your current term coverage or convert to a permanent policy. Here are the various term life insurance policies that State Farm offers:

  • Select term life insurance. Level premiums and a guaranteed death benefit.
  • Return of premium term life insurance. Returned premiums if you outlive your policy.
  • Mortgage term life insurance. Coverage for repaying your home mortgage.
  • Instant answer term life insurance. No medical exam required and good for 10 years or until you’re 50 years old, whichever is longer.
State Farm’s whole life insurance policies offer lifetime financial protection while building tax-deferred cash value. Like term life insurance, these policies feature level premiums, but prices are much higher than term plans. It’s ideal for long-term coverage for things like lost income, estate planning or beneficiary payouts. You can borrow from the cash value of your policy, but outstanding loans or interest reduce the amount of your death benefit.State Farm offers two whole life insurance policies:

  • Limited pay life. Premium payments for 10, 15 or 20 years and tax-deferred cash value growth.
  • Single premium life. One premium payment, lifetime coverage.
State Farm’s universal life insurance policies offer flexible, investment-heavy alternatives to permanent life insurance. Tailor your premium amount and frequency to fit your needs. Policyholders have a choice between investment options featuring tax-deferred cash value accumulation. Death benefit payouts and policy loans are also tax-free.State Farm offers the standard universal life insurance policy, along with two others that cover two people:

  • Survivorship universal life insurance. Covers two people and the death benefit is paid out when the last person insured under the policy dies.
  • Joint universal life insurance. Covers two people, and the death benefit is paid out upon the first death of those insured.

Where does State Farm fall short?

While State Farm’s life insurance policies are comprehensive, you may find that its standard policies can fall short. Policy add-ons allow you to tailor your policy with situational coverage and additional protection. Here are the life insurance riders available at State Farm:

  • Accidental death. Provides an additional payment if the insured dies as the result of an accident.
  • Flexible care benefit. Access a portion of your death benefit amount every month if you become chronically ill.
  • Family life insurance. Provides coverage for immediate family members instead of taking out separate plans.
  • Disability income. Provides a monthly stipend to help cover expenses and support your family if you become disabled and unable to earn income.
  • Funeral expenses. Provides an additional payout to help cover funeral expenses.
  • Estate protection. Offsets any additional estate taxes if your life insurance policy is included in your estate.
  • Accelerated benefits. Payout of portion of benefits if you’re diagnosed with a terminal illness. Covers things like cost of living and long-term care.
  • Death benefit guarantee. When you die, your beneficiary is guaranteed a payout.
  • Long-term care benefit. This rider pays out a portion of the death benefit to cover the costs of long-term care.

What do customers say about this brand?

State Farm is not accredited by the Better Business Bureau (BBB) or TrustPilot, but does have an A- rating on the official BBB website. Despite its high levels of customer satisfaction and positive consumer reviews elsewhere, reviews on the BBB and TrustPilot websites showcase a lot of negativity. However, most of these complaints are about its auto insurance, so take this with a grain of salt.

How do I file a life insurance claim with State Farm?

Filing a claim with State Farm can be done through your agent, online or by phone. Here’s how:

  • Through your agent. Start by locating your agent online. Once you contact them, let them know you’d like to file a claim. They’ll walk you through the process.
  • By phone: Call Life Claims at 877-292-0398, then select option 1 to start a new claim.
  • Online. Visit its claim center to start your notice of loss, then follow the five steps. Call 877-292-0398 for assistance at any time.

Regardless of which method you choose, here is the information you’ll need to provide:

  • Insured person’s full name and nickname (if any)
  • Date of birth
  • State of residence
  • Life insurance policy number (if known)
  • Date and cause of death
  • Name of person reporting the claim, and his/her relationship to the deceased
  • Daytime and evening phone numbers

After your agent receives the notification of death and contacts the beneficiary, they’ll take care of all necessary forms. You’ll be notified of the status of your claim and can manage it online.

How can I get the best life rates with State Farm?

Each life insurance provider has different ways to determine your rates, but it never hurts to know what factors influence your premiums. Preferred plus is State Farm’s best rate class, and here’s what you’ll need to be eligible:

Blood pressure. Under 115/70
Cholesterol. Total cholesterol must be under 175
Driving record. No moving violations in the past two years, no DWI/DUI ever
Family history. No family history of cancer or heart disease
Lifestyle. Must take part in routine, vigorous exercise

State Farm financial stability and credit ratings

State Farm is extremely financially stable and very capable of fulfilling its debt obligations. It received an A++, the highest possible rating from A.M. Best, the most relevant ratings agency in the insurance industry.

What other services does State Farm offer?

State Farm specializes in insurance, but its subsidiaries allow it to offer a wide range of other financial products:

  • Auto insurance
  • Small business insurance
  • Home, condo and tenants insurance
  • Fire insurance
  • Long-term care plans
  • Mutual funds
  • Retirement plans
  • Annuities
  • Living benefits plans
  • Disability insurance

Bottom line

If you’re very healthy and live an active lifestyle, State Farm might be perfect for your needs. The company values its customers and offers unbeatable customer service and overall satisfaction. However, if you have any pre-existing conditions or want a more affordable option, you should consider looking elsewhere. Regardless, it never hurts to compare your options to save time and money.

Compare life insurance policies today

Enter your ZIP code below and click Compare now
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Your information is secure.

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