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State Farm vs MassMutual Final Expense Insurance

Licensed Life Insurance Agent/Marketing Manager
July 06, 2020

When this review was first written both State Farm and MassMutual offered final expense insurance. However, MassMutual no longer offers a policy specifically designed for final expense, however, they do still offer a whole life policy.

There are still many companies that offer final expense insurance. Is State Farm the right one for you? 

About State Farm

State Farm was founded in 1922 and has a long tenure of being well recognized in the insurance industry. So well in fact that they are ranked number 36 on the Fortune 500 list.1 

State Farm is a mutual company that offers life insurance, car insurance, home insurance, health insurance, annuities, and business insurance. They have over 58,000 employees and 19,000 independent contractor agents, they also service 83 million policies and accounts throughout the country.2

About MassMutual

With a much longer history, MassMutual has already celebrated its 165th anniversary after being founded way back in 1851. Throughout this time, they have had one main focus which has been protecting the loved ones of the policyholders and securing a future for all.

According to MassMutual, this key principle is behind every decision they make and everything they do.3 As a mutual company, they have no shareholders which means that the policyholders share ownership and sometimes see the benefits of this through dividends.4

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State Farm vs. MassMutual final expense life insurance

Final expense life insurance is most commonly used to pay off any burial expenses so the burden doesn't fall on your loved ones. However, your beneficiary has the ability to choose how the funds are spent. 

The average funeral today costs almost $10,000,5 that is a big chunk of change that your family could be responsible for. Having a final expense policy in place can help ensure your loved ones don't have to pay for those expenses out of pocket. 

State Farm and MassMutual are two of the behemoth companies that offer final expense policies. Let's break down the differences and similarities between the two. 

Company
Death benefit payout
Age range
Exam required?
State Farm$10K only50-80*Most likely no
MassMutualN/AN/AN/A

*Age range is 50-75 for those in New York.

Table created for illustration purposes only. Information available at StateFarm.com. and MassMutual.com. Data effective 7/6/2020.

State Farm final expense insurance

State Farm offers a final expense policy to those in all states except MA. They offer a whole life policy that pays $10,000 to your beneficiary when you pass away. This policy is available to those who are 50-80 years old unless you are in New York, in which case it is offered to those who are 50-75 years of age. 

One thing that stands out which this policy is that the policy amount is only available for $10,000. This is unusual for this type of life insurance policy. Typically, the amounts are lower, however, they usually go up to an amount such as $50,000 and you can generally choose an amount between $10K-$50K. State Farm only provides one option for the death benefit payout amount. 

While the State Farm site doesn't explicitly say that you won't have to undergo a medical exam, they do say that the death benefit is guaranteed as long as the premiums are paid. Since the policy is guaranteed you likely won't have to take a medical exam or answer health questions with this policy. 

This policy can also earn dividends, but there is no guarantee on this.6 You just have the ability to, which can be an extra perk compared with other final expense policies.

MassMutual final expense insurance

As mentioned previously, MassMutual no longer offers a final expense policy. However, if you already have one through them they will still service it and payout on it when the time comes.7 

A final expense policy is typically a type of whole life insurance policy that has a lower payout amount and you traditionally don't have to take a medical exam or answer health questions. 

MassMutual does offer a more traditional whole life policy. The payout amount isn't listed on their site so it may be for a higher payout amount than you need and most likely you will have to undergo a medical exam. 

There is very little information on the MassMutual site regarding their whole life policy. The one thing they do say is that you have an opportunity to earn dividends with this policy, but it isn't guaranteed.8

If you are in need of more information about MassMutual's whole life policy you will have to contact them directly to speak with an agent. However, it is worth mentioning that plenty of companies out there offer more information about their policies directly on their website. 

How much does final expense insurance cost?

At times the cost can actually be more than a traditional policy since these policies don't usually require any health information. The costs can vary from company to company for a final expense policy. 

How much is final expense insurance with State Farm?

While State Farm does offer up information about their final expense policy online, you won't find any pricing information. 

State Farm encourages you to contact them directly to speak with an agent to get more information regarding the costs of a policy. 

How much is final expense insurance with MassMutual?

As mentioned before MassMutual no longer sells final expense policies, but they do have a traditional whole life policy. 

With the limited amount of information on their site regarding this policy, I'm sure you aren't surprised to learn that they don't give pricing information on their website. They want you to call them directly to get that information. 

Are these companies financially stable?

Both of these companies have been in business for a long time and they both have brand recognition. But are they considered to be financially stable by rating agencies? 

Agency
State Farm Rating
MassMutual Rating
A.M. Best (FSR)A++A++
S&PAAAA+
Moody'sAa1Aa3
FitchN/AAA+

Data from information available at AMBest.com, StandardAndPoors.com, Moodys.com, and FitchRatings.com. Data effective 7/6/2020.

Is State Farm financially stable?

State Farm received top marks from A.M. Best as they have given them a superior rating for financial stability. A.M. Best is the gold standard for rating insurance agencies and receiving top marks from them is excellent! 

State Farm received AA from S&P, which is a top mark for them as well in that they are highly likely to be able to meet any financial obligation.

State Farm receives top marks from Moody's as well with an Aa1 rating. This means that they are deemed to be a high-quality company that is subject to be very low risk who is able to repay both long-term and short-term debts. 

While Fitch doesn't have a rating for State Farm, that isn't negative. They received some of the highest marks from other institutions and as mentioned before A.M. Best is the gold standard for rating financial stability. 

Is MassMutual financially stable?

MassMutual also receives top ratings from A.M. Best and they deem both of these companies to be in peak financial stability.

There is minimal difference between the two ratings received by the S&P, they are both financially stable. 

The main difference with Moody's ratings is that MassMutual is deemed to high quality with the ability to payout long-term debts, and is merely acceptable at paying short-term debts versus State Farm who has a superior ability to repay short-term debts. 

MassMutual did receive a rating from Fitch of AA+. This means that Fitch too deems them to be a high-quality company with a very low risk of not paying debts. 

Both companies receive top-notch scores for being financially stable. 

Do these companies have good customer service?

A great indicator of customer service is the National Association of Insurance Commissioners (NAIC). Official complaints are filed with the NAIC and they compare each company's performance to other companies in the market.

The average number of complaints in the U.S. is 1.00.

State Farm customer service

According to the NAIC, there haven't been many complaints filed against State Farm. They give them a complaint ratio of .23 in 2019.9  As previously mentioned the national average is 1.00, so they are well below how many complaints a typical company receives. 

They received a total of 33 complaints in 2019.10 For raking in just under $5 billion in annual premiums11, that is an extremely low number of complaints. 

MassMutual customer service

The NAIC cites that MassMutual has an even lower amount of complaints than State Farm with a .05 complaint ratio in 2019.12

MassMutual received just 23 complaints in 2019.13 In a similar story MassMutual rakes in a ton of annual premiums, to the tune of $15 billion.14 This is also an extremely low amount of complaints for a company that holds so many policies. 

Conclusion

As you have read MassMutual no longer offers a specific policy for final expense, nor do they offer a lot of information on their website. If you aren't sure if final expense is the right choice for you it may be worth giving them a call as their financial stability and customer service receives top marks. However, if you are set on a final expense life insurance policy you will need to look elsewhere. 

State Farm does offer a final expense policy. And they also receive top marks in financial stability and customer service. While they do offer final expense policy they offer limited coverage amounts (only $10K is available). If you need a different amount then you should look into other options. 

It is important to note that these aren't the only great companies with excellent financial stability and customer service. There are plenty of options to choose from to find the best final expense life insurance policy for you. 

If you aren't sure if a final expense policy is your best option, give us a call today or learn more about the different types of life insurance policies available. 

Sources

  1. State Farm, "Company Overview"
  2. State Farm, "Company Overview"
  3. MassMutual, "About Us"
  4. MassMutual, "About Us"
  5. Parting, "How much does the average funeral cost?"
  6. State Farm, "Final Expense insurance"
  7. MassMutual, "Simplified whole life"
  8. MassMutual, "Whole life insurance"
  9. National Association of Insurance Commissioners, "State Farm"
  10. National Association of Insurance Commissioners, "State Farm"
  11. National Association of Insurance Commissioners, "State Farm
  12. National Association of Insurance Commissioners, "MassMutual"
  13. National Association of Insurance Commissioners, "MassMutual"
  14. National Association of Insurance Commissioners, "MassMutual"
Written by
Chelsie Ball
Chelsie is fixated on developing innovative ways to present complex ideas and maneuvering people to the information they need. She has worked in digital marketing for the past eight years and has been a licensed life insurance agent since 2010. When she isn’t looking out for the user, you can find her watching Netflix or desperately trying to find a real hobby.