Want some good news? With the internet at your fingertips, it only takes minutes to review the financial strength of a life insurance company. We recognize the purchase of a life insurance policy is an important financial decision – and it is one that may impact the financial future of you, as well as your family or beneficiaries for years to come. In many instances, a life insurance policy may be in-force for a number of years before a claim is filed and a tax-free death benefit is received by your loved ones. With this in mind, it is critical for you to know how to determine the best life insurance companies in the market today. Even more important, to recognize which carriers are likely to still be in business for many years in the future to pay your important life insurance claim.
There are hundreds of insurance companies, which can make finding the ideal carrier an overwhelming process. Relax, we are here to help connect you with the best carrier to meet your needs and provide you and your loved ones peace of mind.
How to Determine the Best Life Insurance Companies
Locating a reputable life insurance company involves finding out various criteria that, when combined, signal that the insurer is financially stable, and has a good reputation for paying its claims.
To conduct business in a particular state, insurance companies are required to meet certain standards, as well as to comply with specific state insurance regulations and laws. If a consumer does purchase insurance from a company that is not licensed, he or she will have little recourse if they have an issue. Worse yet, should an unlicensed insurer go out of business due to bankruptcy, consumers who own policies through that company will have no protection under the state’s guaranty associations.
Each state has its own department of insurance. These agencies can provide consumers with important information such as:
- Whether the insurance company is licensed to do business in a particular state (or is licensed at all as an insurer);
- The length of time that the company has held its license;
- The company’s contact information such as its address and phone number;
- Statistics on any complaints that have been filed on the company, as well as the number of such complaints that have been filed over the past few years;
- The ratings that the insurance company rating agencies have assigned to the company.
What the Life Insurance Company Ratings Mean
Life insurance company ratings can be compared in many ways to a “report card.” There are two key areas in which insurers are typically rated. The first factor includes the company’s financial strength. Here, an insurance company is rated based on a quantitative and qualitative analysis of its operating performance, the strength of its balance sheet, and its overall business profile. Letter grades (A+, A, A-, B+, B, B-) are used to indicate how an insurer rates in this category.
Life insurance companies are also rated based upon their financial size. This rating can offer an indication of the total size of an insurer based on several factors, including its technical or conditional reserve funds, its policy holder surplus, other investment and operating contingency funds, and various other miscellaneous reserves that are reported as being liabilities.
While each of these agencies provide ratings that differ somewhat from each other, overall the insurance companies with the higher letter grade marks are considered to be the most stable and financially secure in terms of payment of their insurance claims.
Life insurance company ratings may be obtained via phone, through the mail, or on the Internet. In checking with a rating agency, it is important to understand what the ratings that are assigned to a particular company mean. It is also a good idea to compare an insurer’s current ratings with any past ratings that it has received to get a clearer picture of whether or not the company has run into any recent financial or liquidity issues.
Getting Cheap Life Insurance
A very common reason that people do not purchase life insurance is that they assume a policy is going to be too much for their budget. In many cases, this is just not accurate. There are numerous ways you can ensure that you’re getting the lowest premiums available.
Eliminating tobacco usage is one of the first things that you could do to decrease your life insurance premiums. If you smoke, you can expect to pay much higher premiums, up to twice as much as those who do not smoke. If you are looking for the best insurance premiums, you’ll need to cut out the tobacco.
Another way that you can secure lower rates is by starting a healthy diet and getting regular exercise. Both of these behavior adjustments can help you lose weight, lower your cholesterol, decrease your blood pressure and drastically lower your odds of being diagnosed with severe health issues. This is a good start to achieve better results from your medical exam, which is going to translate into much lower premiums.
We recommend working with an independent insurance agent to ensure you are receiving the lowest rates available. They work with many different highly rated insurance companies across the nation. Your agent does all the leg work and pre-screening for you to save you time and aggravation.
Locating the Top Life Insurance Companies
It is very easy and free to locate the strongest life insurance companies. Simply complete the free quoting form located on this page (right hand side), and you will receive multiple life insurance quotes in seconds. Your next step? You may look up the insurance companies online to review their overall financial strength. Or… you can chat with an independent life insurance agent.
Your agent will have experience working with each insurance carrier and will offer their professional insight to match you with the right carrier and the best type of policy for your needs.
For example, certain life carriers have very tough underwriting; meaning you must be in excellent health to qualify for a life policy. On the other hand, some carriers are very lenient with their underwriting and accept less-than-perfectly healthy applicants. A professional agent will know which company to recommend after a brief conversation.
Your agent can direct you to the best no exam life carriers if that is the type of policy you are seeking. Your health will determine which specific life carrier your agent will recommend to you.
If your health is excellent than a company that requires a medical exam makes perfect sense as you will generally enjoy lower premiums compared to a no exam policy.
The key to working with a life insurance carrier is reviewing their financial strength, length of years in operation and input from your independent agent.
When making any type of financial decision, it is important to go into the process with a good understanding of where your funds are being used. This is especially the case when working with an insurance company. Remember why you are buying life insurance in the first place. It is to protect the ones you love from having to start a “go fund me” page to help pay for food and the rent or mortgage. It is difficult enough to lose a loved one unexpectedly. It is even more painful to come to grips with the realization that come next Friday there will be no paycheck to pay your many bills.
Calculating Your Life Insurance Needs
Before you apply for insurance coverage, you’ll need to ensure that you’re getting the correct amount of life insurance protection for your family. When you’re considering exactly what your life insurance needs are, there are several different elements that you should account.
The first thing that you should do is add up all your current debts or any final expenses that your family would be left with after you pass away. Be sure to add up your mortgage, student loans, car payments, credit cards, and much more. It’s important that the surviving spouse has the money that they need to pay off all or most of your bills.
Next, let’s examine your annual income if you are the main source of income, or if your spouse is the main source of income. Life insurance needs to be purchased on the primary wage earner. I recommend at least 5 – 10X your annual income in life insurance to adequately protect your loved ones from your unexpected death.
TIP: Remember this clearly. It is not the person who passes away unexpectedly that has to pay the bills and raise the children for the next 20 years. It is the surviving spouse. It is the survivor who will be suffering emotionally and financially from the loss of their spouse. With insurance rates at an all-time low, it is highly recommended you get started today and gather quotes and start an application to get your family protected.
We know that finding the perfect life insurance policy can be a long and difficult search, but we can help. Our agents can help you find the best policy to meet your needs. Nobody wants to think about his or her own death, but it’s important that you plan for the worst to ensure that your loved ones have the protection that they need.
They say it is “better to be five years early in buying a life insurance policy than five minutes too late.”. Good words to live by.
Life insurance is truly “love insurance”. Protect those you love the most today.
We suggest you gather a free quote with our easy quoting form located on this website. Easy, fast and convenient quotes at your fingertips!