How to Find the Best Life Insurance Company
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UPDATED: Jul 16, 2021
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When you shop for a policy make sure you are using the best life insurance company possible. The financial strength of the life insurance company you choose is extremely important because if the company becomes insolvent, it will not be able to pay the death benefits to your beneficiaries. The best life insurance companies are financially sound, and are easy to work with should you need assistance when you need to alter a policy or file a claim.
Why You Need the Best Life Insurance Company
Your life insurance policy consists of promises— (1) The promise you will pay your premiums to the insurance company in exchange for (2) the promise to provide coverage in case of death (pay your claim). Life insurance company ratings indicate how reliable a company is able to live up to its promises. If the company has a very high rating, it will usually have no difficulty in fulfilling its part of the contract.
Life Insurance companies with low ratings can be more problematic, however, they are able to pay their claims as well. Of the thousands of life insurance companies, only a very few get in really serious financial trouble. The policyholders of the failed company may be unable to withdraw money from their policies for some time, but eventually they will probably get all, or nearly all of what they are entitled to under their contracts.
TIP: The best life insurance companies will not risk delays in payments due to financial troubles.
Rating Life Insurance Companies
You can find the best rated life insurance company by reviewing the analysis of each company made by professional rating agencies. The primary rating agencies include:
- A.M. Best
- Moody’s Investor Service
- Standard & Poor’s
- Duff & Phelps
- Weiss Research
A.M. Best is the premier rating company, although the others offer a good indicator of who the best life insurance companies are. Each rating service uses a different rating scheme so you should find out what the ratings definitions are for the service that you are using. Stick with companies that meet the service’s criteria for being in the top categories–such as “excellent” or “very good.” If you use Weiss Research’s ratings, you may find them a bit lower than the others as they tend to be tough graders. Also, be sure that any life insurance ratings you use have not been changed since the publication date of the source. You should look for update sheets or call the rating company to be sure.
For an extensive list of ratings and customer reviews of each life insurance company, click here to visit the Free Advice rating center.You can also get an idea of the insurer’s financial strength by asking an insurance agent look up the rating for you.
Choosing a policy with the best rated life insurance company ensures that you are getting that you are getting life coverage with the best life insurance company. To find you the best life insurance policy with one of the highest rated life insurance companies, click here for an insurance quote at Free Advice
Read more articles to help you understand life insurance by clicking here.