Is State Farm Term Life Insurance A Good Deal?

State_Farm_Logo

While State Farm is a great company with impeccable financial ratings and great TV commercials (It’s Jake, from State Farm…), are they competitively priced in the term life insurance market?

The answer is NO, they are not competitive for term life insurance. 

They may offer good auto and homeowners insurance rates in your area, but you will always pay significantly more than you have to for term life insurance through State Farm.

Below are a few examples of State Farm’s $500,000- 20 year term rates compared to the absolute best $500,000- 20 year term rates out of 121 different insurance companies in our database.  I’m showing you Preferred Plus and Regular (or Standard) rates for each category as a range of the cost for people in very good health to average or slightly less than average health.  These are all annual rates:

                             State Farm                          Lowest Rates
    Male Age 40:   $525- $1,105                       $340- $695
Female Age 40:   $425- $830                          $295- $575

    Male Age 50:   $1,195- $2,245                    $895- $1,670
Female Age 50:   $950- $1,660                       $655- $1,275 

    Male Age 60:   $3,185- $6,010                     $2,376- $4,345
Female Age 60:   $2,150- $3,935                     $1,650- $3,205 

Why Would Anyone Buy State Farm Term Life Insurance?

Probably because it’s convenient if you already have auto or homeowners insurance through State Farm, and probably because you aren’t aware of how much money you could save with other companies.

As you can see from the comparison above, you’ll pay a good bit more on your term life insurance through State Farm than you would through other carriers.

Using the 60 year old male rates above as an example;

  • if you’re in great health, you’ll pay $16,180 more for the State Farm 20 year term rate over 20 years 
  • if you’re in average health or have some minor health issues, you’ll pay $33,300 more for the State Farm 20 year term rate over 20 years

So there is significant savings available to you by applying for other insurance companies term life products and not applying to State Farm. 

What About State Farm Multi-line Discount

If I bundle my auto, homeowners and life insurance, are they a good deal then?

Based on information on State Farm’s website, “If you have auto insurance with State Farm®, purchasing a State Farm life insurance policy may entitle you to a discount on your auto premiums with our multi-line discount”.

So the life insurance cost will not be discounted, but you may be able to get a discount on your auto insurance only if you buy life insurance or another product from State Farm. 

Because auto insurance rates are never fixed, the multi-line discount could be hard to verify, but definitely worth looking into if you do buy life insurance through State Farm. 

Is State Farm Good for People With Health Issues?

Most life insurance companies will “rate you” or charge an additional premium for health issues based off of their Standard or Regular rates. 

Ratings usually start at a table 2 or B rating which is a 50% increase over the Standard rates.  Every rating above equates to a 25% additional premium, so Table 3 or C equates to a 75% rating, Table 4 or D equates to a 100% rating, etc.

So if you’re a type 2 diabetic or if you have coronary artery disease and may have had 1 or 2 stents or bypass surgery, then you may be able to qualify for a Table 2 or B rating up to a Table 4 or D rating with many insurance companies. 

Below is the approximate cost of State Farm’s $500,000- 20 year term rates at Table 2/B to Table 4/D rating compared to the current best $500,000- Table 2/B to Table 4/D rates in our database of rates from over 121 different insurance companies at ages 40, 50 and 60.  These are annual rates:

                              State Farm                            Lowest Rates
    Male Age 40:   $1,657- $2,210                     $1,305- $1,719
Female Age 40:   $1,245- $1,660                     $733- $958

    Male Age 50:   $3,367- $4,490                    $2,167- $2,810
Female Age 50:   $2,490- $3,320                    $1,590- $2,100

    Male Age 60:   $9,015- $12,020                   $5,721- $7,608
Female Age 60:   $5,902- $7,870                     $3,913- $5,198 

Using the 60 year old male rates above as an example;

  • if you can qualify for a table 2 or B rate with both State Farm and the company that has best Table 2/B rating, you’ll pay about $65,880 more for the State Farm 20 year term rate over 20 years 
  • if you can qualify for a table 4 or D rate with both State Farm and the company that has best Table 4/d rating, you’ll pay about $88,240 more for the State Farm 20 year term rate over 20 years 

So as you can see, if you have health issues and you want to buy term life insurance, you’ll definitely want to choose a carrier other than State Farm.

Not to mention, there are niche insurance companies that will almost always make significantly better offers to diabetics, people with heart disease or other health issues compared to the rest. 

Finding the right company for you can be the hard part. 

How Do You Get The Best Term Life Insurance Offer?

You must deal with a specialist  who can offer you rates from all of the competitive insurance companies, not just 1 or even 10 or 20. 

If you’d like to get quotes for best rate available to you, please feel free to use the quoting tool on the right hand side of this page, or you can call us at 1-800-380-3533, click here to email us or you can click on the SSL secure link below to provide us with more specifics about you and we’ll email you with quotes from best carriers for you:

Click Here To Get An Accurate Life Insurance Quote