Life Insurance Company

The most important thing you should consider when choosing from the over abundance of life insurance companies is the policy. However you should give some thought to the life insurance company that sells you the policy. You want the life insurance company to still be in business when it comes time for you to collect cash values, or for your family to receive their benefits. So how are these life insurance companies rated, which one is best for you, and what happens if the worst happens?

From 1988 to 1992, twice as many life insurance companies went out of business than in the previous decade. Among these life insurance companies were two of the biggest companies in the U.S. insurance industry. After this happened the rating agency that handed out ratings to life insurance companies came under attack for being too easy of a grader. Since then several other rating companies began to issue their own life insurance company ratings. A. M. Best, Duff & Phelps, Moody's, Standard & Poor's (S&P), and Weiss Research are the current five major rating companies. These firms use financial data supplied by the companies and filed with the National Association of Insurance Commissioners, as well as the judgment of their professional analyst to evaluate whether an insurer will be able to pay claims to policyholders. Out of all of these rating companies Weiss Research gives the most accurate of ratings. They give out poor ratings for the consumer's interest, not caring whether or not they are accepted by the industry's leaders.

The life insurance company that provides you the best policy is usually the one that you should choose. You should also keep their ratings in mind when choosing a life insurance company. When choosing between a Weiss A+ rated life insurance company with a poor policy and a Weiss B+ rated life insurance company with the better policy, you should consider the one with a lower rating. Quite a few life insurance companies use these ratings as a major selling point, therefore providing lower returns on their policies. In sales presentations it is common for agents to toss out financial strength ratings, both for the companies they represent and for their rivals simply to get you to accept their terms.

If the worst does happen and the life insurance company you choose gets into financial trouble, insurance regulators may be able to salvage your policy. The first thing they will try to do is arrange for a stronger life insurance company to assume the policies of the failing carrier. If this happens your coverage simply continues with the new life insurance company. If no stronger life insurance companies pick up your policy, then state regulators call on guarantee associations to make good on your policy. These associations are organizations of all the life insurance companies doing business in your state. They agree to make good on the policies of any troubled life insurance company, up to a certain amount of money varying from state to state.

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