Term Life Insurance Company Ratings: How to Compare Insurers and Choose Coverage

Last Updated: September 24, 2026 | Written by President of Term Life Online – AU, AAI, ARM

What are Term Life Insurance Company Ratings?

Term life insurance company ratings are assessments published by independent rating organizations and research firms.

The most important distinction is that financial-strength ratings are not the same thing as customer-satisfaction ratings.

Financial-strength organizations such as AM Best and S&P Global Ratings evaluate insurers from a financial perspective.

For example:

• S&P describes an insurer financial-strength rating as a forward-looking opinion about an insurance organization's ability to pay its policies and contracts.
• AM Best evaluates factors including an insurer's balance-sheet strength, operating performance, business profile, and enterprise risk management.

Customer studies answer a different question: How do policyholders rate their experience with the company?

• J.D. Power's U.S. Individual Life Insurance Study evaluates areas including trust, value for price, ease of doing business, people, product offerings, service, problem resolution, and digital channels.

Understanding this difference can make insurance ratings much easier to interpret.

Why Life Insurance Company Ratings Matter

A term life insurance policy may remain in force for decades.

If you purchase a 30-year policy at age 35, for example, the insurer could potentially be responsible for paying a death benefit many years from now.

Financial strength is therefore an important consideration.

A strong financial position does not guarantee that every customer will have a perfect experience, nor does a customer-satisfaction score tell you everything about an insurer's financial condition.

Think of ratings as one piece of the puzzle.

You should also consider:

• The insurer's financial strength
• Premium costs
• Coverage amount
• Term length
• Underwriting requirements
• Available policy features
• Conversion options
• Customer service
• Claims experience
• Your eligibility
• Whether the policy fits your family's financial needs

How AM Best Life Insurance Ratings Work

AM Best is one of the most recognized sources of insurance-company financial-strength ratings.

Its Financial Strength Rating scale includes categories such as A++, A+, A, A-, B++, and others.

AM Best describes A++ and A+ as Superior, while A and A- are Excellent.

For example:

AM Best reported in July 2026 that New York Life Insurance Company and several related companies had an A++ Financial Strength Rating, with a long-term issuer credit rating of aaa.

But an important point is often overlooked: an insurance company's rating can change.

For instance, AM Best reported in March 2026 that Banner Life Insurance Company and William Penn Life Insurance Company of New York were downgraded from A+ to A. AM Best still described the companies' balance-sheet strength as very strong.

That is why it is smart to check current ratings rather than relying on an old article or outdated list.

What Does an A+ Life Insurance Rating Mean?

An A+ rating from AM Best means the insurer has a Superior Financial Strength Rating.

That is generally a positive indicator of financial strength, but it does not automatically mean the company offers the best policy for your situation.

For example:

An insurer with an excellent financial-strength rating may have a higher premium for the coverage you need than another financially strong company.

The goal is not simply to find a letter grade.

The goal is to find coverage from a financially strong insurer that also fits your budget and protection needs.

Other Life Insurance Rating Companies

AM Best is not the only organization that evaluates insurers.

Other major rating organizations include:

S&P Global Ratings

S&P Global Ratings publishes insurer financial-strength ratings designed to provide a forward-looking opinion concerning an insurer's ability to pay obligations under insurance policies and contracts.

Its insurance methodology considers factors such as business risk, financial risk, capital and earnings, risk exposure, and funding structure.

Fitch Ratings

Fitch also evaluates insurance companies using financial-strength rating criteria. Its insurance methodology considers factors that can affect an insurer's financial strength, including capital, financial flexibility, business characteristics, and risk.

J.D. Power

J.D. Power approaches the subject differently. Its individual life insurance study focuses on the customer experience rather than simply evaluating financial strength.

The 2025 study was based on responses from 5,065 individual life insurance customers and measured eight areas of the customer experience.

The important takeaway is simple:

A financial-strength rating and a customer-satisfaction rating are measuring different things.

Term Life Insurance Company Ratings vs. Price

A highly rated insurance company can still charge more for your policy than another insurer.

That is because life insurance premiums are based on your individual circumstances.

Insurers may consider factors such as:

• Age
• Health
• Tobacco or nicotine use
• Family medical history
• Occupation
• Hobbies
• Coverage amount
• Policy term
• Medical history
• Prescription medications

This is why looking at a company's rating alone is not enough.

A better approach is to compare financially strong insurers while also comparing the actual quotes available to you.

Want to see what you may qualify for? Request a free life insurance quote and compare available term coverage before making a decision.

What are the Best Term Life Insurance Companies?

There is no single company that is automatically the best choice for every applicant.

The right insurer can vary depending on your age, health, tobacco use, desired coverage, term length, budget, and underwriting profile.

For example:

A company that offers an attractive rate to one healthy non-smoker may price coverage differently for someone who uses tobacco or has certain health conditions.

That is one reason comparing multiple insurers can be more useful than choosing a company from a generic "best companies" list.

A quote comparison can show you how insurers actually view your specific application.

How to Compare Term Life Insurance Companies

Start by determining how much coverage your family may need.

Many people consider income replacement, mortgage obligations, debts, education expenses, childcare, and other household financial responsibilities.

Next, choose an appropriate term.

Common term lengths include 10, 15, 20, and 30 years. The appropriate term depends on how long your family would need financial protection.

Then compare insurers.

Look beyond the premium and examine the insurer's financial-strength ratings, policy provisions, underwriting process, and available features.

Finally, compare actual quotes.

A company with a strong rating may not necessarily offer the lowest premium for your circumstances, while the lowest quote may not provide every feature you want.

Are Life Insurance Ratings More Important Than the Price?

Neither should be considered in isolation.

• Price matters because an unaffordable policy is difficult to maintain.
• Financial strength matters because life insurance is a long-term promise.

Consider both.

For example:

If two insurers offer similar coverage at similar prices, their financial-strength information may become an important factor in your comparison.

On the other hand, if one policy costs substantially more, you should look closely at what you receive for the additional premium.

The objective is to find a balance between financial strength, appropriate coverage, affordability, and policy features.

Don't Choose a Policy Based on a Rating Alone

A rating can tell you something important about an insurance company, but it cannot tell you whether you personally need $250,000, $500,000, $1 million, or another amount of coverage.

• It cannot determine how long your family needs protection.
• It cannot tell you whether a 20-year or 30-year term fits your financial plans.
• And it cannot tell you what premium you will personally qualify for.

Your quote and policy illustrations provide information specific to your circumstances.

How to Get Term Life Insurance Quotes

Getting quotes is one of the easiest ways to move from general research to actual numbers.

You will typically provide information such as your age, state, desired coverage, health history, and tobacco or nicotine use.

Depending on the insurer and policy, you may also need to complete additional underwriting.

When comparing quotes, make sure you are comparing similar coverage.

A $500,000 20-year term policy should be compared with other $500,000 20-year term policies rather than a different coverage amount or term.

Ready to compare? Request a free life insurance quote to see available options based on your personal circumstances.

Term Life Insurance Company Ratings: The Bottom Line

Term life insurance company ratings can be a valuable research tool, particularly when evaluating an insurer's financial strength.

• AM Best, S&P Global Ratings, and Fitch provide financial-strength information, while J.D. Power provides consumer-experience research. Each source measures something different.
• The smartest way to use ratings is not to treat one letter grade or customer score as the final answer.
• Instead, use ratings as one part of a broader comparison that includes financial strength, premiums, coverage, term length, policy features, underwriting, and your family's needs.
• Most importantly, compare actual quotes before purchasing.

Request a free life insurance quote today and see what term life insurance options may be available to you.

Compare Term Life Insurance Quotes

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Resources:

• How to Compare Life Insurance Companies
• Learn How Term Life Insurance Works
• Calculate How Much Term Life Insurance to Buy
• Top Rated Term Life Insurance Companies
• A.M. Best Company: Compare financial strength ratings of life insurance companies
• Life Happens.org: Learn about life insurance and review facts.
• Investopedia: Learn more about financial planning with term life insurance.

About Our Methodology

Reviewed By: President of Term Life Online – AU, AAI, ARM

• 30+ years of experience in insurance planning

How We Keep This Guide Accurate: We regularly updates our content to reflect the latest rates and industry trends. We are committed to providing transparent, unbiased information to help you make the best decision for your family.

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Disclaimer: This is for informational purposes only. Consult a licensed professional for advice.