Life Insurance Company Ratings: What you need to know

About Life Insurance Company Ratings

Life insurance company ratings are simply a “score” or a “grade” that is periodically assigned to a company by an independent rating agency. It is an opinion of a company’s financial strength, which relates directly to a company’s ability to meet its insurance claims obligations. These ratings are based on a quantitative and qualitative analysis of an insurance company’s financial records and their business obligations. The independent rating organization will consider the strength of the balance sheet and other financial records of the company as well as the company’s management and business operations.

Who provides life insurance company ratings?

There are a number of agencies that provide these ratings. Among them are Moody’s, Standard and Poors, Fitch and A.M. Best. These rating organizations typically have a long history of analyzing the operations of insurance companies and are well-equipped to provide informed opinions about them. One of the agencies that provide life insurance company ratings, A.M. Best, was founded in 1899. They have over 100 years of experience (on a global scale) providing ratings and information about life insurance carriers.

Why is a life insurance company rating important?

It’s simple really. As a consumer, you want to know that your life insurance policy is going to pay off should something happen to you. While there are provisions in the laws of most states and within the industry (e.g., state guarantee funds) that make the likelihood of your beneficiaries having a problem nearly impossible, it is far better to know that your loved ones are not going to have challenges in this regard.

What to look for?

If you use our website for life insurance quotes, you can see the insurance company ratings right beside your quotes:

Life insurance company ratings listed right next to life insurance rates.

 

We always suggest companies with an A.M. Best rating of “A” or better. In fact, that is all that our agents sell. If you have questions about life insurance company ratings or you would like to discuss the best life insurance company for your needs, feel free to contact us. We can provide you with whatever information you need in order to make an informed choice.

About The Author

Richard Eddy

Founder of Rates4Term.com and Cona Financial Group Richard Eddy has been assisting clients with their life insurance needs since 2005. He is an expert helping people find the right policy to fit their specific situation. In addition to insurance planning, he is also experienced in a wide range of financial planning topics including investment and portfolio analysis, tax planning, retirement planning and estate preservation strategies. You can call Richard toll-free at (877) 883-3561.