Life Insurance Company Financial Strength – Does it matter?
You should definitely consider financial strength in your selection of a life insurance company. Insurance companies run the gamut from small to large and with lesser financial strength to very strong. How do you figure out if a life insurance company is financially strong?
The shortcut is to check the life insurance company financial strength ratings from the independent analysts. (Follow the link to learn about these.) How are these ratings calculated?
The key method is analysis of ratios and statistics. What does that mean? For example there’s the statistic of how much surplus a company has i.e. how much does the company have in assets more than liabilities? The ratio looked at here is: What percent is that surplus of their total assets?
Other ratios and statistics include the makeup of the life insurance company’s investments (type and quality), the diversity of their product lines and many more. There are lots of statistics and ratios involved in analyzing a life insurance company. I’ll discuss them one by one in future posts.
So, when choosing an insurance company don’t just compare pricing of the policy, look up their financial strength rating as well.
If you need help looking up the financial strength rating of a life insurance company you can call Lifeinsure.com at 866-691-0100, we’ve got access to the ratings from all the major services. We’ll also go over who the financial rating services are in an upcoming post.
