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State Farm Final Expense Insurance Review

State Farm might be a final expense option if you want exactly $10,000 of cover and your loved ones to choose how it is spent.

State Farm Final Expense Insurance Review
(Image: © State Farm)

Our Verdict

State Farm allows your beneficiaries to choose the best use of your final expense payout and guarantees your premiums will not rise. However, if you want a choice over how much cover you want, you’ll have to look elsewhere.

For

  • Beneficiary decides how to spend money
  • Premiums won't rise

Against

  • Just one level of cover
  • Age limits apply

As a well-known nationwide provider of insurance, State Farm seems well-placed to make its mark among the best final expense insurance providers. Established in 1922, State Farm has around a century's worth of experience on which to fall back on. It can also draw on the knowledge accumulated by offering a wide range of other financial services, including mortgages, check and savings accounts, and credit cards. 

State Farm review: What is on offer 

State Farm's final expense insurance cover is set steadfastly at $10,000 - if you want anything more or less, you'll need to look elsewhere. Upon the policyholder's death, the money is sent to the named beneficiary, who are free to use it to cover burial and funeral expenses, or for other purposes as well. 

As well as a guarantee that premiums won't rise during the life of the policyholder, there is also the option to pay premiums either by the month or on an annual basis. Another benefit of this policy is that it acquires tax-free cash value as the premiums are paid, and the dividends can be used at any time while the policyholder is still alive, including to reduce future premiums, or be taken as a cash payment. 

That said, there are some facets to the policy to be aware of. Firstly, the cash dividends are not a guarantee, and any gains that the policy is capable of earning may be subject to taxation. Additional taxes may also be a consideration, depending on the age at which the buyer applies for coverage. 

While final expense insurance from State Farm is what is called a whole life policy, in this instance, the cover ceases at age 100 and the policy expires. Applications are also limited to those between the ages of 50 and 80, or a maximum age of 75 if you reside in New York.

Should you choose State Farm final expense insurance? 

The final expense insurance offered by State Farm offers flexibility in that your loved ones can use the money they receive once you're gone in any way they see fit and there is the promise that premiums won't rise either. However, beyond this, the proposition appears somewhat lacking, particularly given there is just one fixed amount of cover on offer and the age restrictions to consider.