If you've been spending some time researching life insurance companies, you've probably realized that numerous independent agencies issue ratings for each from the providers. Fitch Ratings is among the “Big Three” credit rating agencies – alongside Moody's Investors Service and Standard & Poor's. Here, using Fitch Ratings to assist select the best life insurance company to financially protect you and your family members.
Why life insurance coverage company ratings matter
When shopping for a life insurance policy, ratings matter. The independent rating agencies assist you to, the buyer, understand the financial health from the issuing insurance provider you're considering, which is incredibly valuable whenever you realize you will find countless life insurance companies out there. Since you're buying a policy that may extend over a 30-year term length, you want to select a company that's financially viable now and has demonstrated past financial strength.
The higher the rating, the higher the rating agency's assessment the insurer will be around to deal with your family. We aren't saying you shouldn't pay attention to your great aunt's opinion which insurer she recommends, but a rating agency provides an independent, objective opinion of monetary strength and claims-paying ability.
The story behind Fitch Ratings
Fitch continues to provide research and credit ratings to the financial services industry since 1913 if this began by John Knowles Fitch. The Fitch Group is a member of Hearst and is a worldwide leader in financial information services with operations in more than 30 countries.
Fitch may be the smallest from the Big Three credit score agencies.
How Fitch reports on financial strength
Fitch Rating Reports provide full analysis around the credit profile of the individual issuer, including key rating drivers, rating sensitivities, financials with adjustments, and peers. The ratings of person companies are updated annually.
When evaluating insurance providers, Fitch examines a wide array of factors, including business profile, reinsurance, reserve capacity, catastrophe risk, financial performance and earnings, among many others.
Fitch Ratings fall under 1 of 2 categories: investment grade and non-investment grade. The break-out looks like this:
Investment grade
- AAA: highest credit quality, lowest default risk. Exceptionally strong capacity for payment of financial commitments; highly unlikely to become adversely affected by foreseeable events.
- AA+, AA, AA-: very good quality; very low default risk. Quite strong convenience of payment of financial commitments; not significantly susceptible to foreseeable events.
- A+, A, A-: high credit quality, low default risk. The capability for payment of financial commitments is recognized as strong. This capacity may, nevertheless, be more susceptible to adverse business or economic conditions than is the situation for higher ratings.
- BBB+, BBB, BBB-: a good credit score quality, low expectation of default. The capacity for payment of monetary commitments is considered adequate, but adverse business or economic the weather is more likely to impair this capacity.; business or economic factors could adversely affect the company
Non-investment grade
- BB+, BB, BB-: Speculative. Elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time.
- B+, B, B-: Highly speculative. Material default risk exists, but a restricted margin of safety remains.
- CCC+, CCC, CCC-: Substantial credit risk. Default is a real possibility.
- CC: Very high levels of credit risk. Default is really a strong probability
- C: Default or default-like process has begun
- RD: Issuer has defaulted on a payment
- D: Defaulted
MassMutual's Fitch rating
Haven Life Insurance Agency is backed and wholly of MassMutual. Each Haven Term policy is issued by our parent company, which boasts an AA+ rating from Fitch. That's the second highest of 21 ratings (23 when including RD and D).
A Fitch pr release from late 2021 reported, “MassMutual's large and stable block of traditional cash value life insurance coverage provides favorable credit characteristics including long-duration participating liabilities, relatively predictable cash flows, limited disintermediation risk, and limited guarantee provisions.”
Life insurance coverage is a promise that's only just like the organization that backs it. And thankfully, MassMutual's policies come with a strong financial backbone
Other ratings to consider
There are several rating agencies out there – as well as independent customer review sites – but four seem to be most frequently accustomed to gauge the quality of life insurance companies.
In accessory for Fitch Ratings, A.M. Best, Moody's, and Standard & Poor's also review the industry and all sorts of have their own unique grading scales.
Ratings agencies aren't the only spot to seek reviews from. Knowing what individuals like you have experienced when purchasing and trying to get life insurance coverage could be enlightening in your decision-making process. Trying to find reviews on sites like TrustPilot and Consumers Advocate ought to be an important step of your decision-making process.
Using Fitch Ratings to find the right issuer for you
When you are looking at buying life insurance, or any insurance for that matter, its smart to become selective. Ratings assist you to understand the financial health from the issuing company you're picking which is an indication of the capability to pay claims. It is important.
Look at ratings. Read testimonials. And, always price compare. It is your financial protection and you can be picky if you would like.
