Should I Worry About The Company’s Financial Soundness?
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UPDATED: Jul 16, 2021
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Yes. Since insurance companies deal in financial guarantees, it is important that they be able to fulfill the promises they make to policyholders. Financial strength is the key to being able to deliver on their promises. There are thousands of insurance companies, and most are able to honor their policies. HOwever, a few companies fail every year. If your policy is with a failed company, it will probably be taken over and honored by a strong company even if your insurance company fails, but you could experience a period of claims not being paid and uncertainty about the outcome.