State Life Fund

What Does State Life Fund Mean?

A state life fund is a government-sponsored life insurance program offered by a state to its residents. For example, the Wisconsin State Life Fund provides this type of insurance to Wisconsin residents. Because eligibility is tied to residency, Wisconsin shoppers comparing this option against private carriers often review the best life insurance companies in Wisconsin before deciding which route fits their needs.

Insuranceopedia Explains State Life Fund

A state life fund is a government-sponsored life insurance option that serves as an alternative to obtaining coverage through a private insurer or an employer. While provided by the government, individuals must still apply for coverage and pay premiums. One key distinction between state life funds and private life insurance companies is that state life funds are generally exempt from federal income taxes.

Coverage amounts through a state life fund are typically capped, so residents who need a larger policy usually have to supplement with private coverage or look at the best life insurance companies for a policy that meets their full needs. Premiums for state funds are also not always cheaper than private options, which is why it helps to check the average cost of life insurance before assuming a state-run plan is the lower-priced choice.