State Farm Life Insurance

A whole life policy is different in a Universal Policy; nevertheless, a Universal Life Insurance police in reality is a variable policy/term policy. Likewise, there is no such thing as a saving account or nest egg account. The saving account is in reality is an account in case you failed to meet the goal of the Cost of Insurance, which is based on your age. Meaning, as you get older the cost of insurance increases on your Universal Life Policy. So, if you out live your twenty year policy in the end you will be paying approximately $2,500 a year and expect to increase by to $3500 plus.

Over the year I wrote many letters to the CEO of State Farm and I still have those letters in my possession. I have caught agents in being dishonest, providing misinformation, and being disingenuous. I have had the following policies with State Farm: two house insurance, IRA, Annuity, CDs accounts, and Universal Life. I am about to cancel my last policy with State Farm, which is my Universal Life Policy. If anyone would like to see the letters that I wrote to State Farm CEO you may address your email message to: **. You will be shocked to learn that State Farm is a long way from being your friend or neighbor. State Farm recruiting procedures may make you wonder how low the "bar" for recruiting. State Farm integrity is question to say it mildly. I have many factual information and will update occasionally on this site.

A few years back his policy was reduced from$100k to $97k. We have called to understand how this happened and we were told that back then, State Farm had hard to understand universal life policies and terms and my husband likely did not understand what he signed up for when he got the loan. It is widely accepted that not all customers—or even all insurance agents—fully understood years ago how borrowing could undermine a universal-life policy. We were told that interest is not included in the payment and he gets a yearly bill for interest. The loan itself must be paid off after years of $15/month so why is he still paying it?

The initial $854 should have been paid off in 6 years if it was principal only! The interest “bill” that comes once a year does not look like a bill! Every year we have gotten one, we mistook it for a yearly statement because It does not have a due date, if it is not paid by a certain time there is no second notice, no one calls to say we are late- nothing. It does not look like a normal State Farm bill. Only when I called to ask about this, it was explained to us that if it’s not paid, they automatically add the interest to the outstanding loan balance every year. We had no idea about this! No one has asked us if this is what we wanted, State Farm takes the liberty to do this as a “courtesy”.

Had we known or understood that we were supposed to pay this interest bill, or if it looked like a normal bill- we would have arranged to pay it every year. And why is the interest not just included in the monthly payment we make? Why is he still being charged $15 a month for $854 that should have been paid off? Why has none of this been explained to us? Why would our agent of 18 years allow a $854 loan to turn into $6900 over the years and not help us understand what was happening? Why not suggest a higher payment or make us aware that interest wasn’t being paid and the amount is getting so high that $15/month will never pay it off?

We have 5 policies with State Farm and they call and send a notice if anything goes wrong and our monthly payment doesn’t go through. They make sure to do this so that our past due amount doesn’t get out of control and so our policies don’t lapse. Why hasn’t anyone done the same for this high interest that has accrued? They admit that we likely didn’t understand and the once a year interest statement should be worded differently to help customers understand. Also, why was the initial amount of the death benefit reduced by almost $3000? Was that supposed to pay down the interest? It is so confusing!

We called headquarters on 6/24 and they were rude and offer no solution. State Farm is supposed to be like a “good neighbor” and be there for their customers as they claim. We have been loyal customers since 1998 and yet received no help or understanding. I want State Farm to refund and reverse this outrageous $6900 interest. We will never be able to pay this off. I also want them to change their statements and paperwork to be easier to understand and clear to their customers. I want them to add a due date to yearly interest bills and make it look like an actual bill. I want them to send a notice BEFORE taking the liberty to keep adding interest every year and advise their customers on what will happen if only the minimum payment is paid on a loan.

At this point we will NEVER be able to pay it back. Eventually, after all of these years, my husbands policy will lapse because of this high interest. It is not fair and it is apparent that their practices are designed to get customers to sign up for the appeal of being able to withdraw or get a loan when needed- use complicated paperwork and language and allow customers to pay only $15 so that interest will build up and they can collect a lot of money. Please do the right thing and be a good neighbor, be there for us like you say! Waive this outrageous interest! There is not enough money for us to withdraw from our policy because of this confusing and outrageous interest! We have been good customers for years- please be good to us in return.