State Farm

State Farm offers a long-term care policy that will provide resources if you or your spouse need non-medical care.

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Nursing homes today can cost an average of $87,000 per year. Without long-term care insurance, this can put a significant dent in your savings or other assets. According to surveys done by Genworth, 70% of those over 65 will need long-term care at some point in their lives. This is a fact that is difficult to dismiss. You should consider your options before you or your spouse needs this kind of care. If you are sick, you can go to a hospital, but if you need non-medical support either at home or a nursing home due to a chronic illness or cognitive impairment, long-term care insurance will cover those costs. 

State Farm offers a plan that begins to pay if you become chronically ill. At that point, you may also be relieved of paying your premium. If you are in your 50s or 60s, you should consider long-term care. Don’t wait until you really need it.

Grandfolk Scoring
Cost 10/10
Ease 7/10
Coverage 10/10
Optional benefits 10/10
Limits to coverage 8/10
Years of coverage 7/10
Waiting period 10/10
Customer support 10/10
Accessing benefits 10/10
Cost
What is the monthly fee?
Fees vary depending on your state, age and health
Ease
Is it easy to enroll?
You need to enroll through a licensed agent
Coverage
What does the policy cover?
Home health care, respite care, assisted living facility and more
Optional benefits
Are additional benefits available?
You can opt for inflation protection
Limits to coverage
Are there any limits to coverage?
The daily benefit amounts range from $100/day to $500/day
Years of coverage
How many years can be covered?
You can choose three, five or ten years.
Waiting period
Is there a waiting period?
You can choose 30, 90, or 120 days
Customer support
How easy is it to reach the company?
Very easy; simply call or send an email
Accessing benefits
How do I access coverage?
Once your medical professional determines you are chronically ill
Age Score:
5
50-64 Years
6
65-74 Years
8
75-84 Years
10
85-Above

State Farm encourages people to start thinking about investing in long-term care insurance early, in your 50s or 60s or even earlier. The earlier you start the cheaper your policy will be, especially if you opt for inflation protection. If you are a younger senior who is still active and has no health issues, it will be beneficial to know that a long-term care policy is in place if you need it. If you become cognitively impaired or begin to have mobility issues, you may need to find some assistance to remain in your home. That is when long-term care insurance becomes very important. 

Medicare will not pay for these kinds of services for longer than 120 days. Having a policy to fall back on will make your older senior years more comfortable with less worry.

Health Score:
5
Great Health
6
Good Health
8
Fair Health
10
Poor Health

Seniors in any state of health are eligible for long-term care insurance, but those who are in fair or poor health will find their premiums to bevery expensive. There is more value in planning earlier for when your health eventually begins to deteriorate. You don’t want your spouse or family to have to pay for long-term care out of savings or assets. 

The average person needs approximately three years of long-term care, and at today’s costs for assisted living or nursing home care, the total cost could be $300,000. That means that your care or care of your spouse would take a significant portion of your savings. Think ahead while you are well, and the premiums will be a more reasonable expense to add to your budget.

Pros:

  • You can get a quote for a long-term care policy online.
  • Plans are offered in most U.S. states.
  • The policy will cover rental or lease of a medical help system if you are at home.
  • After using benefits for 90 days, your premiums will be waived.
  • Upon your death, the company provides a refund of unearned premium, if you added this optional benefit.

Cons:

  • There is very little information available about policies on the website. 
  • If you are at home and using a medical help system, the policy covers a maximum of one year.
  • Coverage of a medical help system pays up to 25% of the Maximum Daily Benefit.

Bottom Line:

State Farm Insurance has been in business for almost one hundred years and has over 84 million policies in force in the U.S. It has about 19,000 independent contractor agents who can only sell State Farm insurance. This history proves they have been doing something right. To have staying power in the insurance business means the company has been innovative and willing to make adjustments to its business model. 

State Farm is regularly rated among the top five or ten insurance companies, and are rated well by industry rating companies. But, be sure to do your homework. Make sure you understand exactly what you are paying for. Contracts for long-term care insurance are notoriously long, so try to find an agent you can trust.

Frequently Asked Questions:

What elimination periods are offered? 

State Farm offers elimination periods of 30, 90 or 120 days. This is the period that you must pay for yourself before the insurance begins to cover expenses. The cost of the policy will be lower the longer the elimination period.

Please explain the optional benefits that are available. 

The most important optional benefit is the inflation protection rider. This is only a few dollars more, but keeps your policy amount relevant with inflation. The value of the policy goes up each year based on the inflation rate.

What happens if I need to cancel the policy? 

You can cancel the policy at any time. However, premiums paid will be lost to the company.  You must be able to use the policy to get any benefit from it.

More Information:

Product Details

Overview:  State Farm offers coverage for long-term care should you, your spouse or a family member have a chronic illness, or is injured and needs long-term care. 

Package Details: Each policy is tailored to the policy owner. At the time of purchase, a daily rate must be chosen, as well as the number of years the policy will cover. Once these are determined, a total policy amount is calculated. The total value of the policy is the total amount available. Once that amount has been used, the policy will no longer cover expenses. Therefore, it is wise to opt for inflation protection. This will increase the value of your coverage as costs increase.

Other Services: Auto insurance, life insurance, and homeowner's insurance. The company also offers education savings plans, estate planning, mutual funds, and loans. 

Additional Company Details

Contract Details: Once you have decided to purchase a plan, a contract will be drawn up. Most states require insurance companies to let you review a policy for up to 30 days. If you decide you do not want the policy, you should receive a full refund. The policy will remain in effect during your lifetime as long as each premium is paid on time. The policy cannot be canceled by the company. Premiums may change, but the company must notify you in writing 60 days before the change goes into effect. You may cancel at any time. However, if you do, you will lose any premiums you have paid.

Warranty:  State Farm's long-term care insurance is very flexible. If you find that you can no longer pay the premium, you should speak with your agent, who can work with you to make adjustments to your plan, so you can still afford the policy.

Accreditations: State Farm is recognized as one of the top 100 companies that are friends to veterans, as the company employs a large number of vets. Itis recognized as a 'green partner,’ a company that is involved in building green communities. State Farm also been awarded a CEO Cancer Gold Standard Accreditation in recognition of its commitment to reducing the cancer risks of its employees. 

Awarded by Fortune magazine consistently since 2009, State Farm is recognized as one of the World's Most Admired Companies. The company has many other awards listed on its website. Those listed above are most recent. The main office in Bloomington is not BBB accredited, and has no current rating with the organization. 

Company Details: State Farm, the company whose tag line is “like a good neighbor,” has been selling insurance products since 1922. The original owner was George Jacob Mecherle, a retired farmer. His goal was to do business fairly and do the right thing for his customers. The company originally sold auto insurance, but their line now includes 100 products and services, including property insurance, life and health insurance, mutual funds and banking products. Itis currently ranked #33 on the Fortune 500 list of largest companies. The company has been a leader in auto safety efforts, helping to pass a number of seat belt laws and fighting for teen safety. 

As of December 31, 2016,State Farm held over 84 million policies, and processed about 39,000 a day. According to the Better Business Bureau's website, a legal case against State Farm by the State of California was resolved in May 2017, when State Farm agreed to pay $13.3 million in refunds for overcharging for insurance premiums. 

Note: State Farm will stop selling its long-term care insurance policy as of March 1, 2018. It will most likely have another product available at that time, and it may not be as generous. 

Contact:

State Farm Insurance
One State Farm Plaza
Bloomington, IL 61710
Tel: 800-782-8332
Website: https://www.statefarm.com/insurance/long-term-care

Donna McDurfee - Senior Advisor

Donna is senior researcher with Grandfolk® providing in-depth product and service reviews to empower senior buying decisions.