There are two major types of life insurance—term and whole life. Whole life is sometimes called permanent life insurance, and it encompasses several subcategories, including traditional whole life. universal life, variable life and variable universal life. In 2018, 4.0 million individual life insurance policies bought were term and about 5.9 million were whole life, according to the American Council of Life Insurers.
Life insurance products for groups are different from life insurance sold to individuals. The information below focuses on life insurance sold to individuals.
Principals of Life Insurance Term
Term Insurance is the simplest form of life insurance. It pays only if death occurs during the term of the policy, which is usually from one to 30 years. Most term policies have no other benefit provisions.
There are two basic types of term life insurance policies: level term and decreasing term.
- Level term means that the death benefit stays the same throughout the duration of the policy.
- Decreasing term means that the death benefit drops, usually in one-year increments, over the course of the policy’s term.
In 2003, virtually all (97 percent) of the term life insurance bought was level term.
For more on the different types of term life insurance, click here
Named after its Pennsylvania hometown, Erie Insurance has provided car insurances since 1925. The company is known for its sterling record in settling claims and for its overall client service. In fact, J.D. Power ranked Erie as number 7 among insurance companies in the nation for its 2020 U.S. Auto Claims Satisfaction Study.3
Pros and Cons
- Long history of financial stability, reliability
- Good rates for young drivers
- Discounts geared toward drivers younger than 21
- Not available nationwide
- No online claims-filing
Erie unfortunately is not a nationwide carrier; rather, it is a region-specific insurance company, based primarily in the Northeast and Midwest. Its products are available in Illinois, Indiana, Kentucky, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, Wisconsin, and the District of Columbia. To verify coverage in your area, you can visit the Erie Insurance website and enter your zip code.
In the areas it serves, Erie Insurance offers all of the state-required auto insurance coverage. Additionally, it offers:
- Pet Insurance (for injuries during an auto accident)
- Personal item coverage for items damaged, destroyed, or lost in an auto accident
- Glass coverage for windows, windshield
- Roadside assistance/rental car coverage
- Locksmith services
Also, for just $35 or less extra per year, you can add Erie Auto Plus to your policy. With this plan, you receive diminishing and waived deductibles, a $10,000 death benefit, and other elevated benefits.
Among the wide array of discounts are some rate reductions that will specifically appeal to parents of teen drivers or young drivers paying for their own insurance policy. These deals include:
- Youthful Driver Discounts for unmarried drivers younger than 21 who live with their parents
- Driving Training Discounts for drivers younger than 21 who complete an accredited training course
- Erie Rate Lock, which keeps premiums the same every year regardless of accidents
- Multi-car and multi-policy discounts of up to 25%
Despite being a regional car insurance company, Erie Insurance doesn’t clown around in terms of customer satisfaction. In fact, J.D. Power awarded Erie the #2 spot in the mid-Atlantic region and #1 spot in the North Central region during the 2021 U.S. Auto Insurance Study.4
Erie maintains an A+ rating with the Better Business Bureau and a complaint index of 1.10 from the National Association of Insurance Commissioners (NAIC), representing a slightly higher than average level of complaints relative to other companies in the market.56 The company has an A+ rating in financial strength from AM Best.7
State Farm Car Insurance
State Farm has grown over the past century into one of the largest insurance companies in the nation: In fact, with 84 million policies across the U.S., it insures more cars and homes than any other carrier. State Farm has top ratings from AM Best.13 State Farm requires agents to exclusively sell State Farm. This means that agents can’t offer you auto insurance from multiple companies, and instead will exclusively work with State Farm and tend to be familiar with State Farm’s offerings. Its network of local agents prides itself on providing the best possible customer service.
Pros and Cons
- Large, established carrier
- Numerous discounts geared to students
- Competitive rates
- Mediocre customer satisfaction/claims processing
- Pressure to work through a local agent
State Farm is available nationwide in all 50 states and the District of Columbia. Unlike some companies that work only out of a corporate headquarters—increasingly common in this digital age—State Farm has a decentralized model, functioning more like a network of regional agents dedicated to their local communities.
State Farm offers all the needed and desired coverage for any driver nationwide. Additional coverage options include:
- Rideshare insurance for Lyft and Uber drivers
- Emergency roadside assistance
- Rental car & travel expense reimbursement
State Farm seems to love young drivers—students in particular. Among the breaks it offers:
- Good Student Discount of 25% for those in high school and college who maintain good grades
- Student Away Discount for families with a college student who uses the car only when at home
- Defensive Driving Discount for anyone who completes an approved driver safety course
Additionally, State Farm offers a Steer Clear discount of up to 15% for drivers younger than 25 who maintain a clean record with no traffic violations for three consecutive years evaluate their driving habits and learn where to make improvements for the future.
Many car insurance customers love State Farm because it is one of the few national car insurance providers that still exclusively uses local agents to provide outstanding customer service. But don’t just take our word for it—check out State Farm’s #6 rating on J.D. Power’s 2020 claims satisfaction study.3 State Farm also maintains a 4-star rating (out of 5) on Consumer Affairs, an independent consumer rating site.14