Tips for Evaluating Financial Strength of Life Insurance Companies

Who provides life insurance company ratings and why do they matter to consumers? The following tips offer useful information on choosing a life insurance company you can depend on to be there when you need them. Some of the leading services offering life insurance ratings include A.M. Best and Company, Moody’s Investor Service and Standard & Poor’s. Ratings are expressed slightly differently among life insurance rating services. If you aren’t sure how to interpret a rating there are two things you can do. • Look for a legend that provides a definition for the rating – for example, with Moody’s, Ba1, Ba2 and Ba3 mean the company has been assigned a “questionable” rating. • Talk with your agent to help you interpret life insurance ratings. Policy holders pay premiums based on the promise that the life insurance company will pay the benefit in the event of a claim. If the promise is broken and the benefit is not paid the consequences could be devastating. When you are shopping for life insurance be sure that the life insurance company rating figures prominently in your decision making.