Choosing a Life Insurance Company

What to Consider When Choosing a Life Insurance Company

How do I choose the right life insurance company?

If you’re shopping for life insurance coverage you may want to consider several tips when it comes to choosing the right company for your life insurance.

We all want to make sure the insurance company we choose will still be in business when we pass away, so they will be able to pay the life insurance policy death benefit to our loved ones. 

That’s why the financial strength of your insurance carrier is one of the most important things to consider when selecting a life insurance company.

 

When choosing a company for life insurance you may want to consider the following:

 

  • Financial Strength – What is the A.M. Best financial strength rating of the insurer? The financial strength rating of an insurance carrier is an indication of the insurer’s ability to pay their life insurance claims and meet their financial obligations.The higher the rating, the more financially secure the insurance company. The highest rating for life insurers offered by AM Best is "A++" Superior.There are several independent rating agencies that review the financials of insurance companies and issue ratings. Some of the leading independent rating agencies include A.M. Best Company, Moody’s, Dunn & Bradstreet, and Standard & Poor’s.Choosing a life insurance company with a rating of at least "A" Excellent by AM Best may be a good rule of thumb for selecting a financially secure insurer.
  • Pricing – Compare life insurance rates from several carriers to help you find the most affordable plan from a highly-rated insurer. When you compare rates online you’ll receive the price comparisons from multiple companies and these quotes will show you the financial ratings of the companies.
  • Types of Policies – Make sure the company offers both term life insurance and permanent life insurance. That way, you can compare plans and pricing for short and long term life insurance coverage.
  • Customer Service – Does the insurer have a good reputation for customer service? Do they provide 24/7 customer service?
  • Claims Handling – Does the insurance company have a good reputation for paying out life insurance claims in a timely manner?
  • Complaints – Does the insurance carrier have any complaints filed against it with the Department of insurance in your state?
  • Total Assets and Liabilities – A life insurance company with a low ratio of assets to liabilities may not be as financially secure as other carriers.
  • Number of Life Insurance Policies – What is the number of individual life insurance policies issued by the insurer in the past few years? Do they have millions of policyholders or thousands?
  • Ranking – Is the carrier ranked in the top 50 or 100 of all life insurance companies in America?
  • How Long in Business – In what year was the life insurance carrier established? The longer in business the more experience.

 

  

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