Life Insurance Company Ratings
Why are life insurance company ratings so important to you?
Your life insurance policy is only as financially secure and safe as the life insurance company that issues the policy. That’s why it’s important to consider your life insurance company ratings.
You may want to take a look at the financial strength rating of the insurer you are choosing for your term life insurance policy. There are a few resources you can use to review information on financial ratings of insurance companies.
Guide to Life Insurance Company Ratings
- Identifies what factors are important in evaluating a term life insurance company.
- Explains how and where you can check on a life insurance company’s financial strength rating.
- Shows you a list of resources to learn about and review insurance company ratings.
- Why you should consider the top term life insurance rating when reviewing term life insurance company ratings for your life insurance carrier.
We’ll cover several factors that you can use when evaluating your life insurance company financial ratings. Here are some factors to consider:
Life Insurance Company Reputation
To determine the reputation of the life insurance company you are considering you could ask friends, co-workers and family members if they have any experience with the insurer.
You could contact the Department of Insurance in your state and ask about any complaints regarding the life insurance company.
It’s important to choose a life insurance company with good customer service and good claims handling.
Complaints made to the Department of Insurance in your state about the insurer’s claims handling or claims payments are an indication you may want to choose another insurer.
Financial Strength of Insurance Company
The financial strength rating of the insurance company is important to consider. You want to make sure the company will still be in business and able to pay your claim if and when the time comes.
It’s important to review the company’s financial rating before buying your policy.
The higher the rating (such as "A" Excellent or better) the more secure you may be in placing your coverage with that insurance company.
Life Insurance Company Financial Rating Agencies
If you want, you can go directly to a financial rating web site like AM Best to check on the insurance company ratings of insurers you are considering.
The leading insurance company financial rating services are A.M. Best, Moody’s, Standard & Poor’s, Weiss, and Duff & Phelps.
These insurance rating services perform a careful financial assessment of the financial strength of each insurance company.
If the life insurance company you are considering is not listed as rated by these agencies, do not assume it has a poor financial rating.
It could mean that the insurance company has not paid the required fee to the rating agency in order to be reviewed by them.
Take a look at the insurance company’s solvency rating, claims-paying ability rating and overall financial strength rating.
This should give you an idea if the life insurance company you are looking at has any financial problems.
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