3 Ways to Evaluate Life Insurance Companies

Written by Mike

When shopping for life insurance it is easy to focus on one thing: the cost of the policy. Like most people, you want to get a high level of coverage at the lowest possible price. While this may be your goal, you don’t want to stop there. Instead, you need to realize that every life insurance company is unique.

What steps are you taking to evaluate life insurance companies? Believing that every provider is the same is a mistake that could lead you down the wrong path.

During the evaluation process, most people focus on the following details:

  • Cost of the policy
  • Coverage
  • Customer service
  • Types of policies available for purchase

While these are very important details, there are others that you need to focus on.

Learn more about Financial Ratings

Did you know that every insurance company is given a financial strength rating from five rating firms? These include: A.M. Best, Fitch Ratings, Standard and Poor’s, Moody’s Investors Service, and TheStreet.com.

But I don’t care about a company’s financial rating! This is quite common. Unfortunately, it is the wrong way of thinking. The stronger the rating the better chance the company has of paying a claim. Search for companies with the highest ratings.

Contact your State

What type of customer service can you expect from an insurance company? Is the insurer in this industry for the long haul? Have others in your area complained about their experience with particular companies?

You can contact your state to compile a variety of information ranging from complaints to market share rankings. Any information you can receive from your state’s department of insurance is information you can use when selecting a company to buy a policy from.

Ask Around

Remember, you are not the only person who is interested in buying life insurance. Chances are that you know many who have already purchased a policy. Along with this, you may know a few people who have had to collect on a claim in the past.

By speaking with family and friends, you can learn more about the industry including first hand experience. Don’t intrude by asking too many personal questions. Instead, collect as much advice as you can and then combine this information with other details that you have collected.

It is all too common to evaluate life insurance companies based on price alone. You are going to be attracted to the company that offers the lowest premium, while still giving you the coverage you want and need. There is nothing wrong with wanting to get a good deal, as long as you also focus on other important details (such as the three above).

Now that you have a better idea of how to evaluate life insurance companies, you can begin your search for the perfect policy. Soon enough, you will find yourself in position to confidently purchase the coverage you need to protect your family in the event of your death. If you are going to spend money on life insurance, you might as well be confident that you are making a good decision.

This entry was posted in Life by Mike.