How To Read Life Insurance Company Ratings 2021
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 700 life insurance companies in America in 2021, 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 2021
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- How To Read Life Insurance Company Ratings 2021
When shopping for insurance in 2021 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.
