Is a State Farm annuity a good choice?
It depends on what you value most. State Farm Life Insurance Company holds an A+ (Superior) grade from AM Best, AA from S&P and Aa1 from Moody's, placing it among the strongest balance sheets in the industry. What it does not offer is rate leadership or independent access: every contract is sold through a captive State Farm agent, and declared rates on its MYGAs and indexed annuities typically trail carriers built around the independent channel. If you already bank on State Farm for auto, home or life coverage and value the local agent relationship, it is a reasonable pick. If your main goal is the highest available rate, compare it against independent-channel carriers before signing anything.
State Farm Life at a glance
| Legal name | State Farm Life Insurance Company |
|---|---|
| Ultimate parent | State Farm Mutual Automobile Insurance Company |
| Founded | 1929 |
| Headquarters | Bloomington, Illinois |
| Ownership structure | Mutual, owned by policyholders, no outside shareholders |
| AM Best rating | A+ (Superior) |
| S&P rating | AA (Very Strong) |
| Moody's rating | Aa1 (High Quality) |
| Annuity products | Future Income Plus and Growth Plus (fixed deferred), Future Income Flex (fixed index), Guaranteed Lifetime Income and Joint Life Income (immediate) |
| Distribution | Captive, through State Farm agents only |
Where State Farm Life sits on the AM Best scale
A+ is grade 2 of 13. Most buyers look for A- or better for a long-term contract.
- A++
- A+State Farm Life
- A
- A-
- B++
- B+
- B
- B-
- C++
- C+
- C
- C-
- D
Today's rates for State Farm Life
Rates change often and vary by state, term and deposit size. Get today's numbers for your state, side by side with other top-rated carriers. Free, with no obligation.
Where State Farm Life came from
Back in 1922, a retired Illinois farmer turned insurance salesman named George Jacob Mecherle set up a mutual auto insurer aimed at other farmers in Bloomington. Seven years on, in 1929, that company added a life insurance arm, State Farm Life Insurance Company, to reach the same base of customers. The parent business has since become the country's biggest writer of personal auto and home coverage, fielding a sales force well past 19,000 people and taking in close to $100 billion each year across its combined product lines.
The life insurance arm answers entirely to its parent, State Farm Mutual Automobile Insurance Company, which itself has no public shareholders. Policyholders hold the ownership stake, and whatever surplus builds up either strengthens reserves or flows back to them as dividends. That mutual setup echoes how Northwestern Mutual, Massachusetts Mutual and New York Life are organized, though those three built their business around life insurance from the start, while State Farm's bread and butter has always been cars and homes.
For an annuity buyer, that structure cuts two ways. On one hand, the combined State Farm enterprise carries one of the strongest capital positions in American insurance, which underpins the A+ grade on State Farm Life. On the other, State Farm's agent force sells State Farm products exclusively, so you cannot pull a State Farm quote and a competitor's quote into the same conversation. Verify the current rating yourself at ambest.com before you commit.
State Farm Life's financial strength ratings
| Rating agency | Rating | Category | Notes |
|---|---|---|---|
| AM Best | A+ | Superior | Second-highest tier on AM Best's scale |
| S&P Global | AA | Very Strong | Third-highest tier on S&P's scale |
| Moody's | Aa1 | High Quality | Second-highest tier on Moody's scale |
| Fitch | Not rated | Fitch does not rate this carrier |
That grade places State Farm Life in the same company as other elite mutuals, reflecting deep capitalization, cautious underwriting practiced enterprise-wide, and an investment book built for durability over yield. Your own state's guaranty association layers on additional protection up to a set dollar ceiling that varies by location; NOLHGA publishes the current figures if you want to check yours.
What annuities does State Farm offer?
The lineup here is short and purposeful: two accumulation products, one indexed product and two income products, a much narrower shelf than a specialist annuity carrier keeps.
- Future Income Plus: Lets you start with an opening deposit and keep adding to it over the years. The declared rate can move annually, growth builds up tax-deferred, and giving up the contract early costs you for somewhere between 7 and 10 years, depending on where you live. IRA and taxable money both qualify. Works well if you would rather build a retirement fund a little at a time than hand over one big check.
- Growth Plus: Takes a single deposit and locks in a fixed rate, filling roughly the role a MYGA plays elsewhere. Growth is tax-deferred, the exit window is usually shorter, around 5 to 7 years, and you can pull 10% out each year without a penalty. It goes head to head with MYGAs from companies like Athene and MassMutual Ascend, though its number usually reflects what a captive sales force costs to run.
- Future Income Flex: Keeps your principal intact while linking part of your return to an index like the S&P 500, within limits set by a cap, a participation rate or a spread. Pay extra and you can attach a lifetime income guarantee, with an exit window that typically runs 7 to 10 years. Makes sense if you want a shot at equity-linked gains without the risk of losing principal to a market downturn.
- Guaranteed Lifetime Income Annuity: Converts one deposit into a paycheck that starts within twelve months. You can choose to be paid only while you're alive, guarantee a minimum number of payments regardless, or take a fixed stretch of payments outright, all resting on the same top-tier balance sheet.
- Joint Life Income Annuity: The same idea extended to two people, continuing payments as long as either spouse is still living, aimed at couples coordinating household income in retirement.
State Farm keeps its declared rates off the public feeds independent shoppers use, so pricing means picking up the phone with an agent rather than pulling a number online. If you want context for how that pricing compares, our MYGA rate comparison tracks carriers that do publish.
Who is a State Farm annuity best for?
State Farm fits best with someone who already has a relationship with a local State Farm agent, cares more about the A+ rating and enterprise scale than about squeezing out the top rate, and likes the idea of keeping insurance and retirement products under one roof. The simple, non-overlapping product menu also makes the decision easier for buyers who do not want to comparison shop extensively.
It is also a reasonable choice for someone shopping specifically for a SPIA. The Guaranteed Lifetime Income and Joint Life Income products price fairly against other A+ rated immediate-annuity issuers, and the payout math is easy to follow. Learn more about how SPIAs work.
Where the fit breaks down is with someone chasing the single best MYGA number or the richest index caps and participation rates on an FIA. Names built around independent distribution, Aspida or Global Atlantic among them, generally beat State Farm on price precisely because they skip the captive-agent overhead. Shoppers wanting a deeper bench of crediting strategies or a premium bonus should also look at MassMutual Ascend or Allianz.
How to buy a State Farm annuity
You will need a State Farm agent no matter what; the locator tool at statefarm.com finds the one nearest you. Book time specifically to talk annuities, since the conversation typically starts with a look at whatever auto, home or life policies you already hold before landing on a specific product and deposit amount.
Paperwork from there looks like any other annuity purchase: settle on the product, term and deposit; complete your state's application and name beneficiaries; wire the money, write a check or move funds via IRA transfer; then use the free look period your state grants after delivery, commonly somewhere between 10 and 30 days, to look everything over one more time.
If you want a broader view before deciding, or you would rather not buy through a captive channel at all, we can pull quotes from other top-rated carriers so you can weigh State Farm's rating and convenience against the open market's rates.
Other annuity companies to consider
- Northwestern Mutual: a top-rated mutual insurer, also captive
- New York Life: a top-rated mutual known for strong SPIA pricing
- Massachusetts Mutual: a top-rated mutual with a broader fixed index and variable lineup
- Mutual of Omaha: a similarly structured life, P&C and annuity carrier
Pros and cons
Pros
- A+ (Superior) from AM Best, one tier below the very top of the scale
- Backed by the consolidated strength of the entire State Farm enterprise, one of the largest personal-lines insurers in the country
- Mutual ownership means policyholders, not outside shareholders, are who the company answers to
- A large captive agent network puts a State Farm office within reach of nearly every U.S. household
- A small, clearly differentiated product lineup that is easy to understand without wading through overlapping riders
- Existing State Farm auto, home or life customers can consolidate everything with one carrier
- Immediate annuity pricing is reasonable for the rating tier, even if it does not always lead the market
Cons
- Sold exclusively through State Farm agents, with no access through independent brokers
- Declared rates on its MYGA-style and fixed index products typically run behind independent-channel carriers
- Rates are not published to public feeds, so getting a quote means calling an agent rather than comparing instantly online
- A narrower set of crediting strategies and living-benefit riders than specialist FIA carriers offer
- Annuities are a secondary line behind State Farm's core auto and home insurance business
- No deferred income annuity, QLAC-specific product or variable annuity in the lineup
Frequently asked questions
Does State Farm make sense as an annuity carrier?
Financially, it holds up well. State Farm Life carries top-tier grades from all three major agencies, cushioned by the balance sheet of the whole State Farm enterprise. Pricing is the softer spot. Distribution runs only through captive agents instead of a lower-cost independent network, and that shows up as declared rates that generally sit under what the open market pays.
Which annuity products can you get through State Farm?
The shelf holds five items. Future Income Plus lets you keep adding money over time under a fixed, resettable rate. Growth Plus takes one lump sum and locks it in, playing a MYGA-like role. Future Income Flex ties crediting to an index while protecting your principal. Guaranteed Lifetime Income and Joint Life Income convert savings into a paycheck for one life or two. A captive State Farm agent is the only place to buy any of them.
Where does State Farm Life rank on financial strength?
Near the top. Its grades sit in the second-highest band at AM Best, the third-highest at S&P and the second-highest at Moody's, all resting on capital drawn from State Farm's much larger property and casualty operation. Ownership runs through the mutual structure, so the people the company ultimately serves are its own policyholders rather than outside investors.
Is there a way to buy State Farm annuities outside a State Farm office?
No path exists for that today. Every contract is written by an agent under contract with State Farm alone, and no independent brokerage carries the paper. Someone wanting to weigh alternatives has to gather a State Farm quote separately and then request pricing on other carriers through an independent channel.
How do State Farm's declared rates stack up against the market?
They usually land below what carriers built around independent distribution can offer, since running a captive sales force costs more than an independent network does. A shopper chasing the strongest number will often find it instead at names such as Athene, Global Atlantic or Aspida, while someone who prizes the top rating and a hometown agent may see the gap as an acceptable price to pay.
Written and reviewed by
James Forren Warren
Licensed Retirement Income Strategist · License #20551202
James Forren Warren is a licensed Retirement Income Strategist with Tax Free Wealth Plan. For the past five years he has helped individuals and families turn their savings into retirement income they can count on. He writes and reviews the annuity research on this site and keeps it plain: what a product does, what it costs you, and who it actually fits.
Sources
Educational only, not investment, tax or legal advice. Tax Free Wealth Plan LLC is a licensed insurance agency, not a registered investment adviser or broker-dealer. Annuities are not bank deposits, are not FDIC insured and are not guaranteed by any government agency. Guarantees are backed solely by the claims-paying ability of the issuing insurance company. Features, rates and availability vary by state and change over time; the contract and disclosure documents govern.
