Life Insurance Company Ratings

An insurance policy is only as good as the company that backs it. There are several important sources of information you need to consider before signing onto to any coverage.


This page:

Explains important criteria for assessing a potential insurer

Shows you a quick method of checking a company's rating

Lists additional reliable sources for insurance company ratings

Premiums can vary by as much as 50%. Enter your ZIP code on the right, and with just one short form, you'll receive quotes from several insurers in your state. Start comparing quotes today:

Use InsureME to compare additional term life and whole life quotes, and get expert advice from an agent in your area, who can help you design a plan that's right for you. Click here to fill out a quick form.

There are five basic criteria that can be used when evaluating an insurance company. Let's take a look at them one-by-one:

Experience and Reputation

Start close to home with the easy questions. Consider any personal experience you've had with a potential insurer. Ask family and friends about their experiences.

How quickly and easily are claims processed? Since life insurance is meant to guarantee a continued financial stability for your beneficiary, it is important to feel confident that your insurance company is stable as well.

Fiscal fitness

The fiscal fitness of a life insurance company is an area people often push to the back of their list when comparing policies on the base of premium costs. However, since you are depending on them, consulting insurance company ratings is crucial.

Past performance

First, look at the past performance of the company. Although a company's future cannot ultimately be predicted by looking at past performance, it can still give you a general idea of what to expect. A general sense of how the company fares can be gleaned from their quarterly reports. Make notes of the good and bad trends.

Reputation

The reputation of the insurance company in your area should be easy information to access.

Ask around.

Often friends, co-workers, and family will know a bit about the insurance company you are considering. Once you buy the policy you will be dealing with the insurance company regularly - and your beneficiaries may too. It's important, then, for them to have a good customer relations and claims handling reputation.

Insurance illustrations

Although we do not strongly advise using the insurance company publications as an evaluation tool, if you understand how to use it can be advantageous.

Insurance companies distribute information about themselves in the form of "illustrations". These are designed to provide accurate facts and figures to potential customers, such as, how the interest rate affects their life insurance policies. However, they are often misleading and occasionally completely incorrect.

We recommend using them for comparison between companies only after you read our guide to insurance illustrations.

A quick way to check ratings

This is the internet - there is always a short-cut.

If you're looking for term life coverage, then get a quick quote from Insured Street. Along with your monthly/yearly premium quote, you will receive the A.M. Best rating for each company that will offer you coverage.

Yes, it's that easy. Not that we would advocate not doing your homework as described above...

Get a quote and check ratings for free now.

Insurance company rating agencies

Finally, you can check the ratings directly with a ratings agency. (These will the same as the ratings provided by Insured Street, though you will be able to get more info beyond an A, AA or whatever grade).

We suggest using the rating guides published either by A.M. Best, Standard & Poor's, Moody's, Duff & Phelps or Weiss.

These agencies assess the insurance company by careful investigation of the company's financial report. Each agency has a different method and researches different criteria, so you may want to consult more than one.

If your company is not listed as an evaluated company in the insurance company ratings by one of the agencies it does not mean it got a bad review, it just means the insurance company did not pay the fee to be reviewed by that particular agency.

Make sure you look into the qualified solvency ratings if not the comprehensive claims-paying ability ratings - these identify troubled insurers.

You should not necessarily be driven by any simplistic rule - like only buying from top-rated companies - but you can still use these insurance company ratings as a guide. If you like a policy and feel comfortable with the company, a less than spectacular rating should not prevent you from purchasing the policy. If you feel the tradeoff is reasonable get the policy you like best.