If the real estate mantra “location, location, location” had a life insurance equivalent, it would apt to be “decisions, decisions, decisions.”
That's because shopping for life insurance coverage requires quite a few decisions: Just how much coverage do you need? In the event you opt for whole, universal or term? If term life, what term length should you choose, and recognise the business do you purchase a policy from?
But how about what you can't control?
Like if the company that issues your policy will be able to spend the money for claim when your family needs it most, even when that's 30 years from now? After all, when the insurance provider can't pay, it won't matter just how much thought you place to your decisions.
Fortunately, there's a helpful solution: life insurance coverage company ratings. Ratings help indicate the financial health from the insurance provider you're considering, which is incredibly valuable when you realize you will find hundreds of life insurance companies out there.
So, here's using ratings to your benefit when shopping for life insurance coverage:
What the ratings mean and how to use them
Life insurance companies receive ratings from independent agencies based on its assessment of the insurer's financial strength and claims-paying ability.
The higher the rating, the higher the rating agency's assessment the insurer is going to be around to take care of your loved ones, as promised. It can serve as a completely independent, objective opinion according to their analysis on items such as customer complaints, available income, and acceptable risk. The agency's rating scales work like grades in class: An 'A' is preferable to a 'C,' for instance.
The top four rating agencies
There are several rating agencies available – as well as independent customer review sites, – but four of them are most frequently touted to represent the quality of life insurance companies.
Each of the four – A.M. Best, Fitch, Moody's and Standard & Poor's – has its own standards and grading scale for rating insurance providers.
- A.M. Best rates companies on the scale of A++ down to F
- Fitch rates companies from AAA to D
- Moody's uses a scale of Aaa to C
- Standard & Poor's rates companies from AAA to D
It's vital that you get acquainted with the rating agency whose grades you're considering. Otherwise, the score may offer you a false sense of security. For instance, A+ is really a.M. Best's second-highest rating, but an A+ is Fitch's fifth-highest rating.
Since each rating agency does its work independently of the other three, each one will have different findings. The best choice is to check a few rating agencies before choosing coverage, much like you'd check more than one reference before choosing a childcare provider. If the ratings are strong across agencies, you've probably picked a good company.
For example, MassMutual, which issues our Haven Term policy, has an A++ rating from A.M. Best* (Superior; Top group of 15) and has a Fitch rating of AA+ (Very Strong, Second Category of 21). The highest and 2nd highest ratings available, respectively.
As the Fitch pr release states, “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.”
To see where other companies rate with individual agencies, you can go to each rating agency's website. Armed with this knowledge, you can avoid life insurance firms that are considered to be on a shaky financial footing.
Don't your investment value of customer reviews
Life insurance ratings help you understand the financial strength of the company what you are buying a policy from, but it's not the only opinion that means something.
You should also search for customer testimonials. As you know, reviews will help you study from other's experiences so that you can select a company or agency that offers the simplest process, reasonable prices and real, caring individuals to help along the way. If a company has frequent, unresolved complaints, that may be an indication that it's not ready to suit your needs.
You don't have to look far to find customer reviews. A fast search of “insert company name reviews” is a great place to start. It can quickly show up everything you need to know in the standpoint of shoppers, media, and experts. You may also usually see reviews on Trustpilot, Consumer Affairs, Good Financial Cents and company Facebook pages, which all specialize in sharing customer experiences.
Decisions, decisions, decisions, meet peace of mind
Thanks to today's technology and the Internet of products, we no longer need to rely on one person's word to find the right life insurance coverage.
Now, all of this scientific studies are at our fingertips, which helps full transparency in the buying process. Due to widely available ratings and online reviews, life insurance seekers can confidently purchase high quality and affordable coverage to assist financially protect their loved ones. And, now you can check “buy life insurance” off your to-do list whenever and where ever you'd like.
