Life
insurance is very different from most
other purchases that you make in that
the needed payout may be decades into
the future. Company stability
becomes a significant issue. It
defeats the purpose to select the
cheapest plan on the market if the
underlying carrier won't be there to pay
out years from now. Because of
this peculiar "buy now" for "much later
on" nature of term life insurance,
insurance carrier rating became a critical issue.
Let's a take a closer look at the term
insurance carrier ratings and how to
read them.
The
first thing you will notice when you run
your
term life insurance instant quote
is that unlike most websites (even some
big ones), we provide all four major
rating agencies: AM Best,
Standards and Poors, Moody's, and Fitch.
We do this for a reason and frankly find
it curious that they don't. Aside
from wanting to provide you the best
information at one source upon which to
choose your
term life plan, only
providing one or two rating agencies can
hide the true strength (or lack there
of) of a given term life carrier.
As
you scan through your quote, you'll
notice that the agencies have very
different ways of analyzing or rating
carrier strength, and quite often, have
differing views of a given company.
It's best to take a "cumulative"
approach to the ratings. If one
company has a unfavorable rating, it
might be a concern and warrant future
research or look for a plan without such
unfavorable ratings. How do you
decipher the ratings since they all use
different scales?
By
the the time you figured out each
company's rating scale, you would
practically be ready to rate the
carriers yourself! We have
simplified this process by providing the
relative rank next to each company's
rating. For example, S&P's "AA"
rating is their third best and
consequently, you'll see a (3) next to
their name for a given plan. This
really helps to compare the rating
agencies in terms of apples and apples
as you are really concerned that a
number ranking of #1 is #1 regardless of
whether it's called "A++" or "AAA".
If you see a dash (rare), it means that
the rating agency has not issued a
rating for that particular carrier/plan.
Ideally, you want the ratings to be 5 or
better in our view. As you go
beyond "5", the strength of the company
starts to become suspect. You'll
notice that you don't find many with bad
ratings quoted on our system because we
believe in only providing the best
term
life insurance carriers so you can make
a decision on price, term, and amount
with peace of mind. Our
theory is that if the major rating
agencies are 5 or better, than can
select based on pricing within this
category for your given situation (age,
health, etc). Some agencies are
more strict or better put, less giving
on their ratings so providing four
different views helps to give you a well
rounded feel for the term life insurance
carrier's overall strength.
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