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How To Read Life Insurance Company Ratings

by Brian M on August 15, 2013 · 3 comments

Read and understand Life Insurance Company Ratings 2014

Understanding Life Insurance Company Ratings in 2014

One of the biggest concerns for someone in the market for life insurance beside cost is choosing a company with superior financial stability.  With over 1,000 life insurance companies in America in 2014, narrowing down the right one can seem overwhelming.  The good news is with a little knowledge of how the industry works; choosing the correct company is a lot less complicated than it appears.

All Strong Companies Payout Claims

As discussed in the previous post, all life insurance companies payout all valid claims.  There isn’t a grey area as there are in other types of insurances, such as negotiating the true value of your totaled automobile with your car insurance company.   Life insurance is indeed a contract, so as long as you pay your premiums and you are honest on your initial application, the insurance company will payout the full death benefit if you were to pass away.

Best Life Insurance Companies That Payout in 2014

With that being said, you want to choose a company with at least an “A-” (Excellent) rating or better by A.M. Best. A.M. Best is the benchmark of rating agencies in the insurance world.  The top tiers of; A++, A+, A and A- all indicate a company is financially strong and is highly rated for its ability to payout future claims. However, once a company falls below the “Excellent” tier, especially into the fifth tier “B++” you probably want to avoid these companies no matter how inexpensive the premium may be.

Understand Financial Ratings

When shopping for life insurance use the chart below to help you navigate through the buying process to know which companies are the highest rated. 

Rank          A. M. Best Standard & Poor’s Moody’s Fitch Weiss
1 A++ AAA Aaa AAA A+
2 A+ AA+ Aa1 AA+ A
3 A AA Aa2 AA A-
4 A- AA- Aa3 AA- B+
5 B++ A+ A1 A+ B
6 B+ A A2 A B-
7 B A- A3 A- C+
8 B- BBB+ Baa1 BBB+ C
9 C++ BBB Baa2 BBB C-
10 C+ BBB- Baa3 BBB- D+
11 C BB+ Ba1 BB+ D
12 C- BB Ba2 BB D-
13 D BB- Ba3 BB- E+
14 E B+ B1 B+ E
15 F B B2 B E-
16   B- B3 B- F
17   CCC+ Caa1 CCC+  
18   CCC Caa2 CCC  
19   CCC- Caa3 CCC-  
20   CC Ca CC  
21     C C  

 

Conclusion

When shopping for insurance in 2014 make sure the company you choose has at least an “A-”(Excellent) rating or better by A.M. Best which will give you the peace of mind knowing your company is financially strong and will be around for a long time.  If you have any questions please leave a comment below.

 

Find the best rates on life insurance in 2014. 

 

{ 2 comments… read them below or add one }

Jeff T August 15, 2013 at 9:42 pm

Great advice. I was looking for a break down explanation of the ratings class. This helps a lot!

Reply

termlifemax August 26, 2013 at 11:37 pm

Our company is bound to adhere to our core values that ensure that we give the rates we have stipulated for our customers before and after making the application. We are committed to integrity hence we keep our word to our clients. The term life insurance rates from our company are offered without any hidden charges. Once you apply the policy cover with us we do not add application or any other fees beyond what is indicated. This ensures that you pay and get what you have applied for.

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