- Qualities of the ideal life insurance company
- June 4, 2015
Purchasing a life insurance policy is a big decision that requires proper preparation and careful decision-making capabilities. This pressure can leave one feeling overwhelmed and nervous about making a decision.
Unlike other forms of insurance (i.e., auto insurance), life insurance isn’t renewed on an annual basis and far less claims are filed. A policy should cover all insurance needs and be easy-to-use, especially when it comes time for a beneficiary to claims the insurance proceeds.
First and foremost, a life insurance applicant should only seek out life insurance companies that have a solid financial history; this shows their ability to meet the current and future financial obligations of their customers.
Fortunately, this information is reviewed and analyzed by four independent rating agencies whose information is available to the public for free. These rating agencies are – A.M. Best Company Inc., Fitch Ratings, Moody’s Investors Services and Standard & Poor’s Insurance Ratings Service.
A good rating indicates a company’s ability to pay out insurance proceeds, whether that be tomorrow or 50 years from now.
Each rating agency uses its own rating system that may slightly differ from another agency. To be on the safe side, it is best to research the ratings from at least two different agencies and figure out why the rates may differ.
When evaluating the financial strength of various life insurance companies, be sure to also evaluate the types of policies that are offered. A company may have a stellar rating from all four agencies but they may not offer certain policies or specific policy features.
For example, if policy conversion is extremely important to an applicant then he or she should only research companies that offer this feature. Don’t waste time looking at companies that don’t satisfy all of your insurance needs. As mentioned above, life insurance isn’t something you renew every year, so make sure you love every aspect of your company and the policy you purchased.
While financial strength and policy features are important, you also want to make sure your insurance company has a history of excellent customer service. This comes into play when you are purchasing your policy, if and when you make any changes to it and, ultimately, when your beneficiary collects the insurance proceeds.
It is recommended to look at customer reviews and complicates, as an insurance company will always speak highly of themselves. However, be sure to take every complicate with a grain of salt as their issue may have been a one time incident.
For more information regarding customer service, search the Better Business Bureau website, the National Association of Insurance Commissioners’ database and even your state’s insurance commissioner records.
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