Learn about Life Insurance Company Ratings
Life insurance company ratings analyze the risks that could affect each particular company’s prospect for long-term survival. You should be extremely aware of the life insurance company ratings for the carrier that you are looking to provide you with valuable coverage. It is of paramount importance that your life insurance claim will be paid if and when your beneficiaries need the benefit.
Well known life insurance company ratings services
Generally speaking, there are several large life insurance company ratings services that analyze the financial strength of term life insurance companies. A.M. Best, established in 1899, is probably the oldest, and most well known. However, there are others that are widely acclaimed, including Standard and Poor’s , Moody’s, and Fitch Ratings.
Interpreting the life insurance company ratings themselves
Rating services all use different letter, number, and symbols for their ratings. Most advisors tend to stick with the top categories as a preliminary way of choosing life insurance companies. Going further down the list exposes you to quite a bit of unnecessary risk due to the fact that the top-rated companies usually have the most competitive products anyways.
A.M. Best Life Insurance Company Ratings
A.M. Best Financial Ratings Strength is an opinion based on a comprehensive quantitative and qualitative analysis of; a company’s holdings , operating procedures, and business profile. The rating process is usually defined by a letter and either a plus or minus. The top four ratings for A.M. Best are:
Standard and Poor’s Life Insurance Company Ratings
Standard and Poor’s Financial Ratings reflect a current opinion of the financial characteristics of an insurance company with respect to its ability to pay its insurance policies and contracts should a claim arise. S&P’s opinion does not take into account deductibles, surrender penalties, promptness of payment , nor the claims investigation process in paying out claims. The top four ratings for Standard and Poor’s are:
Fitch Life Insurance Company Ratings
The Fitch Ratings Financial Ratings system provides their opinion as to the financial strength of an insurance organization, and its financial capacity to fulfill claims to policyholders on a timely basis. Fitch’s ratings do not address how willing an insurance organization’s management to honor its company’s obligations, nor does Fitch address the quality of the consumer experience during the claims handling services. The top four ratings for Fitch are:
Please keep in mind that a company’s ratings have no bearing on their term life rates. For more about life insurance company ratings, please visit our companies page.
