State Farm does not offer indexed universal life insurance, and it does not offer variable universal life either. If you are holding a State Farm policy with the word universal in its name, it is a traditional current-assumption universal life contract, a Joint Universal Life policy, or a Survivorship Universal Life policy. That is a useful thing to establish in the first minute, because the crediting mechanics, the illustration rules and the buyer’s model are all different for indexed products than for what you actually own.
State Farm Life Insurance Company is domiciled in Illinois with its home office in Bloomington, and has been writing individual life coverage since the 1920s alongside the auto and property business the brand is better known for. A separate affiliate, State Farm Life and Accident Assurance Company, issues in certain states including New York and Wisconsin, so check the exact entity on your declarations page. Distribution is exclusively through State Farm agents rather than independent brokerage, which is a large part of why the product shelf is narrow and traditional: term, whole life, universal life, joint and survivorship universal life, and final expense.
What follows is what your policy actually does, a piece of litigation history every State Farm universal life owner should know about, and an honest assessment of whether the contract has secondary market value.
In This Article
- The Products That Actually Exist, and How to Identify Yours
- Vogt v. State Farm: Litigation Every UL Owner Should Know About
- How Your Contract Credits Interest and Where the Money Goes
- Getting an In-Force Illustration Through a Captive Agent
- Does a State Farm Universal Life Policy Have Secondary Market Value?
- Illinois Rules and Where Complaints Go
- Frequently Asked Questions
The Products That Actually Exist, and How to Identify Yours
Read the plan name and form number on the specifications page and match it to one of these:
- Select Term. Level term in 10, 20 and 30-year lengths, with coverage typically starting at $100,000 and annual renewability continuing to advanced ages after the level period ends.
- Whole life. Traditional whole life, limited-pay designs where premiums stop after 10, 15 or 20 years, and single premium whole life. Fixed premium, guaranteed cash value table, no monthly deduction line.
- Universal life. Flexible premium, an account value, a monthly deduction, and a single declared interest rate subject to a guaranteed minimum. This is the product most people mean when they search for a State Farm indexed policy.
- Joint Universal Life. Two insureds on one contract. Read the death benefit provision carefully — first-to-die and last-to-die structures behave very differently.
- Survivorship Universal Life. Pays after the last surviving insured dies. See can I sell a survivorship life policy for why these price so differently.
- Final expense. Small face amounts sized to burial costs, well below any settlement buyer’s minimum.
Product availability varies by state and by issue year, so the current brochure may not describe the contract you bought in 2004. The form number is the reliable identifier. If your annual statement shows index segments with a cap and a participation rate, you are holding a policy from a different carrier — see what is indexed universal life for how those work.
Vogt v. State Farm: Litigation Every UL Owner Should Know About
This is the most consequential documented fact about State Farm universal life, and it is verifiable rather than rumor.
In Vogt v. State Farm Life Insurance Company, a certified class of roughly 24,000 Missouri universal life policyholders alleged that State Farm calculated cost-of-insurance charges using factors beyond those the policy language permitted. A jury returned a verdict of approximately $34 million for the class. On appeal, the United States Court of Appeals for the Eighth Circuit affirmed the judgment on June 26, 2020, holding that the phrase governing how the charge was to be determined was at least ambiguous and therefore construed against the insurer as drafter. The court also ruled for the plaintiff on his cross-appeal regarding prejudgment interest, and the district court subsequently awarded $4,521,674.38 in prejudgment interest.
Why it matters to you as a policyholder rather than as a spectator:
- Cost of insurance is not a fixed, obvious number. It is calculated under contract language, and how insurers apply that language has been contested in court across the industry.
- Class membership is defined narrowly. The Missouri class covered specific policy forms and a specific period. Whether any particular policy was included is a legal question, not something to assume from a news headline.
- If you believe your charges are wrong, the path is a written request to the carrier for the charge calculation and the contract language supporting it, then a complaint to your state insurance department, then your own attorney. That is a legal question and we do not give legal advice.
How Your Contract Credits Interest and Where the Money Goes
A State Farm universal life policy sits on the standard flexible-premium chassis. You pay premium into an account value. The insurer credits interest at a rate it declares, subject to a guaranteed minimum written into your contract — one rate, no index, no cap, no participation rate. Then each month the insurer deducts:
- Cost of insurance, calculated on the net amount at risk — death benefit minus account value — at a per-thousand rate tied to the insured’s attained age.
- A per-thousand policy charge, often heaviest in early years.
- A flat monthly administrative fee.
- Rider charges for waiver of premium, term riders, accelerated benefits and similar features.
Cost of insurance is the engine of every universal life problem. Mortality rates roughly double every seven to eight years in later life, so the per-thousand charge at 84 is a large multiple of the charge at 64. When credited interest no longer covers the deduction, account value falls; a lower account value means a larger net amount at risk; a larger amount at risk means a bigger charge next month. The decline compounds, which is why these contracts look stable for two decades and then deteriorate within a few years. See what is cost of insurance and what is universal life insurance.
The corollary: paying the minimum billed amount preserves the policy this year while the deficit compounds. It is a delay, not a repair.
| State Farm product | Chassis | Interest crediting | Typical settlement candidacy |
|---|---|---|---|
| Select Term | Term | None | Only while convertible, with size and health |
| Whole life and limited pay | Whole life | Guaranteed cash value; dividends if participating | Rare; surrender value often wins |
| Universal life | Flexible premium UL | One declared rate with a guaranteed minimum | Best candidate when underfunded and insured is older |
| Joint Universal Life | Flexible premium UL, two insureds | One declared rate | Depends on first-to-die or last-to-die structure |
| Survivorship Universal Life | Flexible premium UL, two insureds | One declared rate | Prices low; two life expectancies modeled |
| Indexed or variable universal life | Not offered by State Farm | Not applicable | Check the issuing company on your policy |
Getting an In-Force Illustration Through a Captive Agent
State Farm’s exclusive agency model is an advantage here. Your agent can order an in-force illustration and pull current values without the hand-offs an independent broker would face. Make the request specific, because a default illustration will show only the flattering column.
Ask for three:
- Current charges and the current declared rate. What happens if nothing changes.
- Guaranteed maximum charges and the guaranteed minimum interest rate. The worst outcome the contract allows. This is the column to plan around.
- A solve for the annual premium that carries the policy to age 100. The honest price of keeping it.
Request these numbers alongside: current account value and net cash surrender value; any outstanding loan balance and its interest rate; whether a no-lapse or secondary guarantee applies and to what age; any remaining surrender charge; and the exact date coverage ends if you pay nothing further. A signed request from the policy owner is typically required and turnaround is usually a couple of weeks.
When the guaranteed column shows the policy lapsing at 82 and the insured is 74 in reasonable health, the decision stops being theoretical. Guidance on making the request is in what is an in-force illustration.
Does a State Farm Universal Life Policy Have Secondary Market Value?
Sometimes, and the screen is the same as for any carrier. Buyers look for a face amount above roughly $100,000 of net death benefit, with many setting their minimum at $250,000; an insured typically over 70, or younger with a significant documented impairment; a policy past its two-year contestability period; clear ownership and signature authority; and a premium obligation modest relative to the death benefit.
Three carrier-specific notes:
- Financial strength helps. State Farm Life is among the more highly rated life insurers, and a buyer taking decades of carrier credit exposure prefers that. It widens the bidder pool rather than narrowing it.
- Whole life is usually the wrong candidate. A well-aged whole life contract, particularly a limited-pay or single premium design, often carries cash value that no buyer will exceed. Surrender frequently wins, and that comparison belongs in surrender versus sell.
- Joint and survivorship contracts price far lower. Two life expectancies push the modeled payout years out while premiums run the whole time, which compresses the spread severely.
The underlying model is described in how life settlement buyers price a policy. The realistic candidates are a large, underfunded universal life contract on an insured in their late seventies or eighties, or a Select Term policy still inside its conversion window with substantial face amount and meaningful health decline.
Illinois Rules and Where Complaints Go
Two regulators, two different jobs, and people mix them up constantly.
The insurer is regulated where it is domiciled. State Farm Life Insurance Company is an Illinois company supervised by the Illinois Department of Insurance, which handles solvency oversight, policy form approval and consumer complaints about claims handling, lapse notices, charge disputes and servicing. That is the escalation path if a written request to the carrier goes unanswered — see Illinois insurance department consumer help.
A settlement transaction is regulated where the policy owner lives. Illinois governs viatical and life settlement transactions under the Illinois Viatical Settlements Act, codified at 215 ILCS 158, which addresses provider and broker licensing, required disclosures, and the rescission period following a closing. If you live in another state, that state’s act applies to your transaction even though Illinois regulates the insurer. An overview is at life settlement licensing in Illinois.
Three habits regardless of what you decide: call only the number on your own statement or your assigned agent, verify any provider’s or broker’s license with your state department before signing, and require every offer in writing with the gross amount and every deduction itemized, including compensation and the escrow agent handling funds.
Pine Lake Life Solutions does not purchase policies and is not licensed in every state. What we do is read the specifications page and the in-force illustration, tell you which product you actually own, and compare funding it properly, reducing the face amount, surrendering, and testing the market — including the frequent answer that a well-funded State Farm contract should simply be kept. That review is free. Send the policy cover page or call (305) 209-7183.
Frequently Asked Questions
Does State Farm sell indexed universal life insurance?
No. State Farm offers term, whole life, and traditional universal life including joint and survivorship versions, plus final expense coverage. It does not offer indexed universal life or variable universal life. If your annual statement shows index segments with a cap and participation rate, the policy was issued by a different carrier, so check the exact company name on your declarations page.
What was the Vogt case about?
A certified class of roughly 24,000 Missouri State Farm universal life policyholders alleged the insurer used factors beyond what the policy permitted in calculating cost-of-insurance charges. A jury awarded about $34 million, the Eighth Circuit affirmed on June 26, 2020, and the district court later added $4,521,674.38 in prejudgment interest. Class membership was defined narrowly by policy form and period.
Was my policy part of that class?
That is a legal question we cannot answer for you. The class was defined by specific policy forms and a specific time period involving Missouri policyholders. If you believe your cost-of-insurance charges are inconsistent with your contract, request the charge calculation and supporting policy language from the carrier in writing, then consult your own attorney about your options.
How do I get an in-force illustration from State Farm?
Ask your State Farm agent, who can order it directly. Request three versions: at current charges and the current declared rate, at guaranteed maximum charges and the guaranteed minimum rate, and a solve for the premium that carries the policy to age 100. Also ask for net cash surrender value, any loan balance, and the date coverage ends if you pay nothing more.
Is a State Farm policy a good settlement candidate?
The screen is the same as for any carrier: face amount above roughly $100,000 and often $250,000, insured typically over 70 or significantly impaired, past the two-year contestability period, and a premium modest relative to the death benefit. State Farm Life’s strong financial rating helps, since buyers take long-dated carrier credit exposure. Underfunded universal life is the usual candidate.
Where do I complain about a State Farm life servicing problem?
State Farm Life Insurance Company is domiciled in Illinois and supervised by the Illinois Department of Insurance, which handles complaints about claims, lapse notices, charge disputes and servicing. A settlement transaction is governed instead by the law of the state where you live as policy owner, which for most State Farm policyholders will not be Illinois.
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Related Reading
- What Is Indexed Universal Life
- What Is Universal Life Insurance
- What Is Cost Of Insurance
- What Is An In Force Illustration
- Can I Sell A Survivorship Life Policy
- Surrender Vs Sell Policy
- How Life Settlement Buyers Price A Policy
- Life Settlement Licensing Illinois
- Illinois Insurance Department Consumer Help
Pine Lake Life Solutions does not purchase life insurance policies and does not provide legal, tax, or investment advice. Information provided is for educational purposes only. Eligibility for any option, including life settlements, is not guaranteed and depends on individual circumstances, policy terms, underwriting, and market conditions. Consult independent legal, tax, or financial professionals before making decisions regarding a life insurance policy.