Review of StateFarm Life Insurance
In this State Farm Life Insurance Review we will take a look at the strengths, weaknesses and possible alternatives to State Farm.
Are you considering buying life insurance through your local State Farm agent? Are you looking for State Farm Life Insurance Reviews? We can help.
TermLife2Go’s team of professionals have years of industry experience and we can help you make sense of all the choices you have for term, whole, and universal life insurance.
Please take a moment to familiarize yourself with the need to compare life insurance quotes form many different companies, rather than just ONE.
Now before we begin this review of State Farm Life Insurance, we need to state that we love State Farm Insurance.
State Farm Auto insurance is excellent, as is the Company’s renters insurance, and various other areas. In fact, the agents at TermLife2Go have friends who are State Farm Insurance agents. These guys and gals really know their stuff.
State Farm consistently rank as one of the highest rated best life insurance companies in the U.S. year over year.
State Farm, also known as State Farm Mutual Automobile Insurance Company, is a mutual insurance company that focuses on its policyholders, rather than on the whims of stockholders. Mutual insurers are great companies to be a part of because participating policyholders get to share in the profits of the insurer through dividends.
State Farm Strengths
Our goal with this State Farm life insurance review is to shed some light on the various strengths and weaknesses of the company. The reality is, State Farm Insurance has many strengths and few weaknesses. And to show you what we mean, let us start with the company’s financial strength.
Awesome Company with a strong financial foundation
Like a good neighbor, StateFarm is there. Are there any more reassuring words in the insurance world than that? Honestly, StateFarm is our top choice when talking about different types of insurance policies, such as home and auto.
According to the Company’s 2016 financial results, State Farm’s total revenue for 2016 came in above $76 billion. State Farm Life Insurance Company and State Farm Life and Accident Assurance Company had total life insurance premiums of $5.7 billion and paid out dividends of $584 million to policyholders. At the end of 2016, State Farm had over $873 billion of life insurance in force, up almost $30 billion from 2015.
State Farm Life Insurance Ratings
The company carries an A++ rating from A.M. Best. That is the best rating available. State-Farm Insurance is a mutual insurance company on rock solid financial footing.
State Farm Life Insurance Company ratings:
- A.M. Best rating: A++
- Standard and Poor’s rating: AA
- Moody’s rating: Aa1
- Fitch rating: N/A
- Comdex ranking: 98 (out of 100)
Ratings are current as of October 1, 2017.
State Farm Life Insurance
State Farm Term Life Insurance
The company also offers 20 and 30 year return of premium life insurance. After the term period ends, your premiums will be returned, assuming you did not die. If you do die, your beneficiary will receive the full lump sum death benefit.
In addition, State Farm offers mortgage term life insurance for 15 or 30 year terms
Finally, State Farm even offers a 5 year term policy. You can get $50,000 up to $90,000 in coverage and you can choose to renew for an additional five-year term up to age 85 (age 80 in NY), though premiums will increase with age. The policy includes a conversion option so you can lock into a permanent policy if you need to.
Consider term life for protecting the income earner of the household, covering SBA loans for existing or start up business, or fast life insurance for divorce requirements.
State Farm Life Insurance Quotes
Sample State Farm term life quotes are for a preferred plus 40 year old male. Rates are for entertainment purposes and are subject to change. Sample State Farm Life Insurance Quotes last updated January 25, 2016. The below rates in no way reflect what you will qualify for or what premium you will qualify for.
|Face Amount||10 Year||20 Year||30 Year|
State Farm Whole Life Insurance
Another option apart from term life is whole life insurance. You can expect to pay roughly five times or more for whole life vs term life insurance.
State Farm offers three different whole life insurance policy types: Ordinary Whole Life Insurance, Limited Pay Life, and Final Expense.
Permanent coverage, such as whole and universal life, should be used when you need long term coverage. For instance, when setting up business buy sell succession plan, or funding life insurance trusts for estate planning.
Whole Life insurance from State Farm builds cash value which can be borrowed against. State Farm whole life insurance policies come in different options, including:
- Whole Life to 100
- Limited Pay 10
- Limited Pay 15
- Limited Pay 20
- Single Premium Life
Limited Pay Life is similar to single premium life insurance. With single premium life, you pay one initial lump sum payment to get paid up life insurance. Unfortunately, when you go this route you lose some of the tax benefits associated with cash value life insurance.
Another option is to choose Limited Pay Life Insurance which allows you, the insured, to pay for the policy over 10, 15, or 20 years. Once the premiums are paid the policy is paid up and no more premiums are due.
Each of these policies offers cash value accumulation. Cash value can be withdrawn or borrowed against through life insurance loans.
You can withdraw up to your basis in the policy without having to worry about income tax on the cash withdrawal.
Life insurance loans are income tax free. (Who pays tax on loans?) You can use the cash value as collateral and take out a loan from State Farm’s general account. You can then use the loan proceeds for whatever you choose, such as supplemental retirement income, paying down debt, financing your own purchases, or investing in passive income, such as real estate.
Whole Life Insurance Dividends
State Farm offers participating whole life insurance. Participating means that certain policyholders participate in the company’s profits through annual dividends. Dividends can be used for various things, such as:
- paid up additions, which increase the death benefit and cash value
- accumulate at interest with the company
- payable in cash
Whole Life Insurance Riders
With this in mind, you have options later in life just in case you have an injury or disability and won’t have the money to pay for the premiums. Instead, State Farm waives the premiums due so the policy is not cancelled.
Additionally, the guaranteed insurability rider does exactly what the name suggests and allows the insured to acquire more coverage down the road regardless of circumstance or any particular change in lifestyle, such as dangerous hobbies.
Final Expense Life Insurance
State Farm offers $10,000 coverage for what is termed final expense life insurance or burial life insurance. If you need a guaranteed issue life insurance policy this will do the job. However, there are other companies available. Look at the following if you need a breakdown of the best final expense insurance companies.
Universal Life Insurance
Universal life insurance provides flexible lifetime protection, similar to whole life but with the benefit of being able to adjust your premium payments up or down, subject to policy minimums.
The policy’s cash value grows based on interest credited to your cash value account. The policy provides a guaranteed interest rate. However, the actual historical rate declared monthly by State Farm has been higher.
You can choose from two different death benefit options. Option one allows a level death benefit. Option two provides an increasing death benefit, based on the death benefit plus the growing account value.
State Farm offers survivorship life insurance. This type of insurance is also known as second to die insurance. It covers two people. Once both die the policy will pay out the death benefit. It is a great estate planning and life insurance tool.
Joint Universal Life covers two people but pays out on the death of the first person. This is an excellent policy to use to provide income for the surviving spouse.
State Farm Long Term Care Insurance
As people are living longer than ever, the reality of a long term chronic illness grows. A chronic illness is the inability to perform 2 of 6 activities of daily living.
Long term care insurance provides a reimbursement benefit to help you cover costs associated with your care.
State Farm’s Long Term Care Insurance provides several benefits. Primarily, the benefits cover costs associated with in home care, adult day care, assisted living facilities, nursing care, respite care and hospice care.
State Farm Long Term Care snapshot:
- Elimination period of 30, 90, or 180 days
- Benefit amount ranges from $100 to $500
- Benefit period of 2, 3, or 5 years
- Waiver of premium after 90 days of covered care
- Inflation protection, which includes
- Future Purchase Option
- Simple Interest Increase
- Compound Interest Increase
- Guaranteed renewable for life (Premiums can be changed based on all policies in the same class)
State Farm Disability Insurance
Disability insurance is an important part of any solid financial plan and is probably one of the most overlooked insurance products out there. However, 25% of people age 20 years old will experience a disability before retirement.
State Farm is an A++ rated disability insurance company. State Farm offers 4 different disability insurance policies:
- Short Term Disability Insurance
- Long Term Disability Insurance
- Individual Credit Disability Insurance
- Mortgage Disability Insurance
Short term disability insurance (STD) typically kicks in immediately for an accident and within 7 days if the disability is due to a sickness. STD insurance is important if you do not have an emergency fund that you can tap into or if you want to avoid tapping into retirement savings.
Long term disability insurance provides an income benefit for a specific benefit period after an elimination period. The income benefit, benefit period and elimination period can be adjusted to suit your needs.
If you have not looked into disability insurance, please take a moment to read through the linked articles above and discover why it is such a beneficial insurance policy to own.
Disadvantages of State Farm
As you may have read in other State Farm Life Insurance Reviews, the company offers excellent health insurance, renters, homeowners, auto insurance and life insurance. However, at times State Farm’s pricing on term, universal and whole life insurance may run higher than the competition. And the reality is, you do not always want to bundle your life insurance with your health and homeowners insurance.
State Farm life insurance underwriting guidelines may also be a bit strict. At state farm.com sample life insurance quotes, the Company recommends your cholesterol be below 175 to qualify for the excellent health category. With tough underwriting criteria like this, it is important to know you have options.
And just because you have been turned down with State Farm does not mean you cannot get life insurance. For example, State Farm may be restrictive when it comes to getting life insurance with type 2 diabetes and as far as we know the Company does not underwrite type 1 diabetes.
If you have been declined life insurance coverage with State Farm or if you are a State Farm insurance agent whose client has been turned down for life insurance, please give the team at TermLife2Go a call today—We specialize in placing life insurance with pre-existing conditions.
State Farm is but one of many
As awesome as a company as State Farm is, they are but one of many. If you are shopping for the lowest price on life insurance you should apply with a company who can offer you multiple companies. State Farm agents are captive agents. That means an agent who writes for State Farm can only write life insurance with State Farm. With so many life insurance companies to choose from, are you sure you want to limit your choices to just one company?
The best advice we can offer in this State Farm Life Insurance review is to consider your options.
State Farm is an excellent company. But they are but one company of a plethora of companies. You have options.
And for those of you that are looking for life insurance and are high risk you would be best served going with an agency that can shop around on your behalf for the best company available based on your health profile—a company like TermLife2Go.
We work with dozens of the top rated life insurance companies in the United States. We stay on the cutting edge of the various niches within the life insurance world.
This allows us to tailor a policy to each client’s individual need so that we place that client with the best company at the best price for that specific client. Our team of seasoned life insurance professionals will take the time necessary to provide you with the right product as well as service second to none.
We do not favor one life insurance company over another. Instead, we find out what you need and then we recommend the best life insurance company to meet your specific need.
So, what are you waiting for? Give us a call today or visit our Life Insurance Quotes page and see what we can do for you!
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