What State Farm life insurance is and who sells it
State Farm is a mutual insurance company that sells life insurance policies directly to individuals and through independent agents. It is one of the largest life insurers in the United States by number of customers. State Farm offers several types of life insurance — term life, whole life, and universal life — each with different costs, coverage lengths, and how the money works.
You buy a policy from State Farm by contacting a local agent, calling their customer service line, or visiting their website. The agent or representative will ask about your age, health, occupation, and how much coverage you want. State Farm then orders a medical underwriting process, which usually includes a health questionnaire and sometimes a medical exam, before deciding whether to issue the policy and at what price.
State Farm is regulated by insurance departments in each state where it operates. If you have a complaint about a policy or claim, you can file it with your state's insurance commissioner's office, which investigates disputes between customers and insurers.
Key Takeaways
- State Farm offers term life, whole life, and universal life policies, each with different lengths of coverage and cost structures.
- You purchase a policy through a local agent, phone, or website, and State Farm will require health information before issuing coverage.
- Term life covers you for a set number of years (10, 20, or 30 years typically) and costs less than permanent policies but expires when the term ends.
- Whole life and universal life are permanent policies that stay in force as long as you pay premiums, and they build a cash value component you may borrow against.
- State Farm policies are backed by the company's claims-paying ability, which is rated by independent agencies like AM Best and Moody's.
Term life insurance through State Farm
State Farm's term life insurance covers you for a specific period — typically 10, 20, or 30 years. If you die during that term, State Farm pays the death benefit (the amount you chose when you bought the policy) to your beneficiary. If the term ends and you are still alive, the coverage stops and you receive nothing back. You do not build any cash value in a term policy.
Term life premiums are lower than whole life or universal life premiums for the same death benefit amount, because State Farm is only taking on the risk for a limited time. The cost depends on your age, health, occupation, and how much coverage you buy. A 35-year-old in good health will pay less per month than a 55-year-old for the same 20-year term and death benefit.
State Farm allows you to convert a term policy to a whole life or universal life policy without a new medical exam, usually within a set window (often before the term ends or shortly after). This conversion option is useful if your health changes and you want permanent coverage but would not pass underwriting again.
Whole life and universal life policies from State Farm
Whole life insurance through State Farm covers you for your entire life, as long as you pay the premiums. Part of each premium goes toward the death benefit; the rest goes into a cash value account that grows over time, usually at a rate State Farm declares each year. You can borrow against the cash value during your lifetime, and if you surrender the policy (cancel it), you receive the remaining cash value minus any outstanding loans.
Universal life insurance (sometimes called adjustable life) also covers you for life, but the structure is more flexible. State Farm charges you a monthly cost of insurance based on your age and health, and the rest of your premium goes into a cash value account that earns interest at a rate State Farm sets. You can adjust your death benefit or premium amount during the policy's life, within limits. If the cash value grows large enough, you may be able to skip premium payments for a period.
Both whole life and universal life cost significantly more per month than term life for the same death benefit, because you are paying for lifetime coverage and the cash value component. The trade-off is that the policy does not expire, and you have access to the cash value while you are alive.
How State Farm calculates premiums and underwriting
State Farm uses several factors to set your premium rate: your age, sex, health history, current health status, occupation, tobacco use, and the amount of coverage you request. Younger people in good health pay less than older people or those with medical conditions. Smokers pay significantly more than non-smokers for the same coverage.
When you explore, State Farm sends you a health questionnaire asking about past and present medical conditions, medications, family medical history, and lifestyle. For larger death benefits or if you have health concerns, State Farm orders a medical exam, which typically includes a blood draw and urine test. The results go to State Farm's underwriting team, which decides whether to issue the policy at the quoted rate, issue it at a higher rate, or decline it.
State Farm publishes its underwriting guidelines publicly, so you can see in advance what health conditions or situations might affect your rate. If State Farm declines your process or offers a rate you think is unfair, you have the right to request a review or appeal.
Death benefit payout and beneficiary designation
When you buy a State Farm life insurance policy, you name one or more beneficiaries — the people or organizations who will receive the death benefit when you die. You can name a spouse, child, parent, friend, charity, or your estate. You can also name a primary beneficiary and contingent beneficiaries (who receive the benefit if the primary beneficiary dies before you do).
When you die, your beneficiary (or their representative) contacts State Farm with a death certificate and proof of identity. State Farm reviews the claim to confirm the death and that the policy was in force at the time. If everything is in order, State Farm pays the death benefit within a set timeframe, usually 30 to 60 days. The beneficiary can receive the money as a lump sum, in installments, or left with State Farm to earn interest.
You can change your beneficiary at any time during your life by contacting State Farm in writing. This is important if your circumstances change — for example, if you marry, divorce, or have children.
Comparing State Farm to other life insurance companies
State Farm is one option among many life insurers. Other large companies include Prudential, MetLife, New York Life, and Northwestern Mutual, as well as smaller or online-only insurers like Term4Sale, PolicyGenius, and Haven Life. Each company has different underwriting standards, premium rates, and policy features.
State Farm's strength is its network of local agents, which some people prefer for in-person guidance. Its weakness, for some shoppers, is that its premiums are often higher than online-only competitors for the same coverage, because you are paying for agent commissions and local office overhead. If you want to compare, you can get quotes from State Farm and several other companies using the same age, health, and coverage amount, then decide which offers the best value for your situation.
State Farm's financial strength is rated by independent agencies: AM Best gives it an A+ (Superior), and Moody's rates it Aa2 (Upper-Medium Grade). These ratings mean State Farm has the financial resources to pay claims when they come due.
Policy riders and add-ons State Farm offers
State Farm allows you to add riders to your base policy — optional features that expand or modify coverage. Common riders include a waiver of premium (if you become disabled, State Farm waives your premiums), an accelerated death benefit (you can receive part of the death benefit early if you are diagnosed with a terminal illness), and a child rider (adds coverage for your children at a low cost).
Some riders cost extra; others are included at no charge. The riders available and their costs vary by policy type and your state. When you get a quote from State Farm, ask which riders are available and what they cost, so you can decide whether they fit your situation.
Frequently Asked Questions
Can I buy State Farm life insurance if I have a pre-existing health condition?
Yes, but State Farm may charge you a higher premium or decline coverage depending on the condition and its severity. State Farm publishes its underwriting guidelines, which list conditions and how they affect rates. If you are declined or offered a high rate, you can request a review or appeal the decision.
What happens if I stop paying my State Farm life insurance premiums?
If you miss a premium payment, State Farm usually gives you a grace period (typically 30 days) to pay before the policy lapses. If the policy lapses, coverage ends and your beneficiary will not receive a death benefit if you die. For whole life and universal life policies, you may be able to use the cash value to cover missed premiums automatically, depending on your policy terms.
Can I borrow money from my State Farm whole life or universal life policy?
Yes. You can take a loan against the cash value of a whole life or universal life policy. State Farm charges interest on the loan, and you can repay it on your own schedule. If you die before repaying the loan, State Farm deducts the outstanding loan balance from the death benefit your beneficiary receives.
How do I know if State Farm life insurance is right for me?
That depends on your age, health, budget, and how long you need coverage. Term life is usually cheaper and works well if you need coverage for a specific period (like until your children are grown or your mortgage is paid). Whole life or universal life makes sense if you want permanent coverage and can afford the higher premiums. Compare quotes from State Farm and other companies to see what fits your budget.
What is State Farm's process if I want to cancel my policy?
Contact your State Farm agent or customer service to request cancellation. For term policies, you straightforward stop paying premiums and coverage ends. For whole life or universal life, State Farm will send you the remaining cash value (minus any outstanding loans) as a check. There is no penalty for canceling, but you lose coverage when ready, so make sure you have other coverage in place if you need it.