Choosing a Company
Now that you’ve made the decision to purchase a policy, how do you know if the company you choose to purchase through is the right one? Here are some tips to guide you through the decision.
Check out a company’s ratings.
The best way to check the financial health of a company is by looking at its “rating.” Several private companies conduct financial analyses of insurance companies and their reports can typically be accessed online, via the phone or by visiting your local library. Some will provide their ratings for free and others will charge a small fee. Keep in mind that not all agencies use the same ratings system. For instance, Aaa is the top rating at Moody’s, but A++ is the best ranking at A.M. Best. So be careful when comparing information from different ratings agencies. Also remember that a company’s rating is just one of several factors to look at when considering a purchase. If you’re evaluating two policies and one is underwritten by a company with an A.M. Best rating of B+ (“good”) and the other is from a company with an A rating (“excellent”), don’t automatically assume you should buy from the higher-rated company. If the policy from the other company has more of the features you’re looking for, it might be the better choice.
Does company size matter?
Purchasing through your workplace.
Check for complaints against a company.
Life insurance companies are regulated by state departments of insurance, which track complaints filed by consumers. To look up complaints against a particular company, visit the National Association of Insurance Commissioners’ searchable database.
The Bottom Line
The “right company” for you is the one that provides you with appropriate recommendations, products and prices, has a record of outstanding customer service, and the financial capacity to meet its financial obligations to you and your beneficiaries when they come due.