Most Solvent Life Insurance Company

With so much economic uncertainty, seniors searching for life insurance can feel confident in the financial security of their policies with State Farm. With an A.M. Best financial strength rating of A++, the risk of the company being unable to meet its policy obligations is low. Factoring in State Farm’s No. 1 ranking in customer satisfaction by J.D. Power, seniors can also enjoy the benefits of working with an insurance company that cares about the customer experience. Although State Farm’s life insurance has several positive elements, there are a few drawbacks to consider in the pros and cons list below.

Pros and Cons of State Farm’s Life Insurance

Pros:

  • Insurance quotes take minutes online
  • Term insurance policies are renewable until the age of 95
  • Bundling options can lower overall premiums

Cons:

  • Limited policy options without medical exam requirements
  • Policy changes must be completed in person or through standard mail
  • Term insurance premiums are higher than many competitors

Overview of State Farm’s Life Insurance

Established in 1922, State Farm is most known for home and auto insurance. As one of the largest life insurance companies in the United States, State Farm now offers a variety of insurance and financial products, including banking and investment options. This allows the company to encourage bundling, saving the policyholder money on premiums, and the stability of this Fortune 500 company makes it a solid choice for anyone worried about future economic downturns.

Company Overall Score (1-5 Scale) Senior Friendliness Ratings and Reviews Financial Options Riders and Customizations Online Services
State Farm 3.5 1.4 10 5 0 8.34

How Much Does State Farm’s Life Insurance Cost?

Life insurance rates vary widely based on age, policy choice, benefit amount and health profile. In general, when compared to other insurance companies, State Farm tends to have low prices but is certainly not the cheapest option. When compared to the cost of premiums for a healthy 20-year-old, premiums can go up as much as 200% between the ages of 55 and 65. Seniors may be able to take advantage of limited savings by bundling their life insurance with other products from State Farm, and the consistently solid customer service may be worth the slight added expense.

Eligibility, Plan Details and Other Information

Eligibility and plan details differ between policy types. Term, whole and universal life insurance options have some limitations for seniors who are looking for the best coverage for their needs. The information below will compare the options relevant to seniors for each category.

Term Life Insurance

Term life insurance coverage is limited to a specified period of time and only paid out if the policyholder passes before that term is up. State Farm only offers two types of term life insurance to seniors: select term and return of premium term. For both types, death benefits are tax-free, and either can be converted to a permanent policy, at no cost, without completing a medical exam.

  • Select Term Life Insurance: Seniors are only offered 10- and 20-year terms for select term life insurance.
  • Return of Premium Term Life Insurance: If the policyholder survives the term of this option, 100% of premiums are returned.

Policy Type

Age Limits

Starting Coverage Amounts

Select Term Life Insurance

10-year term: 18 to 75

20-year term: 18 to 65

$100,000

Return of Premium Term Life Insurance

20-year term: 18 to 60

$100,000

Whole Life Insurance

Whole life insurance pays a benefit if the policyholder passes and gains cash value over time. State Farm offers all whole life insurance options to seniors. All policies are offered as lifetime coverage, and any cash value of the insurance is paid to the policyholder should the policy be canceled. Premiums for this type of insurance are consistent throughout the life of the policy as long as it remains in good standing.

Final Expense Policy

This policy type has a lifetime premium term, and State Farm offers online statement access. Benefits are paid in one lump sum and designed to cover after-death expenses.

Limited Pay Policy

Seniors pay their full premiums during their premium term rather than over their lifetime. This policy also includes a tax-deferred cash value that is available to the policyholder if needed. Seniors have the option to pay premiums monthly, quarterly, semiannually or annually.

Single Premium Life Policy

This policy requires an upfront, lump-sum premium payment. Single premium policies come with the option for the policyholder to withdraw from the tax-deferred cash value amount when needed.

Whole Life Policy

This traditional policy also requires lifetime premium payments, but the premiums can be made monthly, quarterly, semi-annually or annually. This policy type also allows tax-deferred withdrawal of any accumulated cash value.

Policy Type

Age Limits

Starting Coverage Amounts

Final Expense Policy

50 to 80

(50 to 75 in New York)

$10,000

Limited Pay Life Policy

0 to 85

$50,000 for a 20-year premium term

$100,000 for a 15-year premium term

$250,000 for a 10-year premium term

Single Premium Life Policy

0 to 80

$15,000

Whole Life Policy

0 to 85

$25,000

Universal Life Insurance

Universal life insurance is another permanent insurance option but with more flexibility in premiums. Seniors have the option to change their death benefit amounts but will often require a medical exam for approval to increase. Lowering the benefit amount will reduce premiums if needed, and accumulated cash value can be used toward premium payments. State Farm offers three universal insurance options to seniors.

Universal Life Insurance

A universal policy earns interest, which is applied toward the value of the account. A guaranteed insurability option can be added that allows an increase in coverage without a medical exam. Death benefits can either be a level amount based on the value chosen or a variable amount that includes cash value.

Survivorship Universal Life Insurance

This option offers an estate preservation rider that will offset any estate taxes charged to the family once the policyholder has passed.

Joint Universal Life Insurance

This policy covers two people and pays death benefits after the passing of one. The account value can be increased through premiums and accrued interest. 

Policy Type

Age Limits

Starting Coverage Amount

Universal Life Insurance

0 to 85

$25,000

Survivorship Universal Life Insurance

18 to 90

$250,000

Joint Universal Life Insurance

18 to 85

$100,000

Who Should Consider State Farm’s Life Insurance?

Seniors Who Already Have State Farm Financial Products

State Farm offers some excellent discounts for those who maintain multiple policies or use other financial products offered. Those who already have home or auto insurance may see significant savings that go with the convenience of having every policy in one place.

Seniors Who Anticipate Frequent Contact with Customer Service

High customer satisfaction ratings ensure seniors who need assistance from the company will likely have a positive experience. Because life insurance can be complex, it’s important to feel comfortable asking questions and getting a full understanding of policy benefits and limitations.

Seniors Over the Age of 65 Who Want Term Coverage

Many insurance companies cap the age limit of term life insurance at 65. State Farm offers a 10-year term policy to seniors up until their 75th birthday.

What Are People Saying About State Farm’s Life Insurance?

Feelings about State Farm life insurance products tend to be positive. The broad range of policies and riders, combined with a strong customer support system, makes this company a solid choice for most policy shoppers. Some disappointment has been expressed that State Farm life insurance isn’t offered in all states, but it seems that disappointment is also a by-product of the largely favorable reception of the company’s products.

Although there are some negative reviews regarding policy misunderstandings, these experiences can largely be avoided by taking the time to clarify any questions policyholders may have. Many State Farm customers express appreciation for the discounts offered to those with multiple insurance policies, and local agents are generally considered to be helpful and attentive.

Frequently Asked Questions

What Is Whole Life Insurance?

Whole life insurance is a permanent policy that remains active with regular, lifetime premium payments and pays death benefits once the policyholder is deceased.

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What Is Term Life Insurance?

Term life insurance has a set period of time that benefits will be paid in the event of the policyholder’s death, usually from 10 to 30 years.

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How Much Life Insurance Should You Have?

Life insurance needs vary but should be enough to either cover burial and funeral costs or to settle debts and provide for dependents.

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Can You Have Multiple Life Insurance Policies?

Multiple life insurance policies are allowed as long as the policyholder meets eligibility requirements and keeps up with the premiums for each policy.

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What Are Life Insurance Living Benefits?

Living benefits refers to tax-deferred cash value, accumulated with the policy over time, that can often be withdrawn while the policyholder is still living.

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