When you hear the name State Farm, you probably think auto or home insurance. But according to a new report, the company is a solid contender for your life insurance needs as well.
State Farm earned the top spot for customer satisfaction among the top life insurance companies selling individual life in the latest annual study by consumer research group J.D. Power. The insurer won top honors in 2014 as well.
To measure satisfaction, J.D. Power interviewed nearly 6,800 individual life insurance customers and asked them about their satisfaction with price, policy offerings, interaction, billing and payment. State Farm received five “power circles,” the J.D. Power version of stars, in all four measurements. It was the only company to do so.
Who earned top honors
Here are the top-scoring companies for overall satisfaction, based on J.D. Power’s scoring system of five possible “power circles.”
|Best life insurance companies, 2015|
(out of 1,000)
(out of five)
|1||State Farm||823||☻☻☻☻☻||Among the best|
|2||Northwestern Mutual||820||☻☻☻☻☻||Among the best|
|3||Allstate||801||☻☻☻☻||Better than most|
|3||Nationwide||801||☻☻☻☻||Better than most|
|5||Mutual of Omaha||791||☻☻☻☻||Better than most|
|5||New York Life||791||☻☻☻☻||Better than most|
|7||Guardian Life||788||☻☻☻☻||Better than most|
Source: J.D. Power. The industry average score was 770.
The three lowest-ranking companies among the 20 included in the survey were:
Communication is a trouble spot
Among the survey’s key findings: Communication is a trouble spot for life insurance companies, according to Valerie Monet, director of the insurance practice for J.D. Power. Nearly half (46%) of customers surveyed said they don’t completely understand their life insurance policies, and nearly 20% never hear again from their agent after the purchase.
In a perfect world, an insurance agent would make sure no questions go unanswered. But as a consumer, it’s important to ask for clarification if you don’t fully understand the details of what you’re buying, Monet says.
Insurance agents should also reach out at least once a year, because a client’s life insurance needs can change drastically in a relatively short time. For example, newlyweds who buy a house might have enough insurance to help the surviving spouse pay off the mortgage if one dies. But if they have a child a year later, they can be suddenly underinsured.
“It’s all about having the right product for you,” Monet says. “Customers always have options.”
Even with the No. 1 spot in customer satisfaction, State Farm says the report will help it continue to “find specific areas where we can improve.”
Betsy Hoylman, spokeswoman for No. 2 ranked Northwestern Mutual, said, “We’re grateful to see recognition of the commitment we make to our 4 million policy owners, who rely on us to help them plan and achieve financial security.”
The bottom line
The top insurers in J.D. Power’s survey have a lot of happy customers, but no matter who’s covering you, don’t be afraid to ask if you need help understanding your policy and evaluating your changing needs.
If you find yourself without enough coverage, compare quotes from different companies. The insurer you bought from previously may no longer have the best deal for you. NerdWallet’s life insurance comparison tool can help you easily find prices.
Donna Freedman is a former contributing writer for NerdWallet.