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Life Insurance Company Financial Ratings

life insurance company ratings

Written By Doug Mitchell

Doug Mitchell, CLU holds a BA degree in Finance from Auburn University as well as having obtained a Chartered Life Underwriter (CLU) designation from The American College in Bryn Mahr, PA.  Doug has spent close to 30 years in the insurance and financial planning industry and has held licenses to sell securities, long-term care insurance, health.  Doug is also a financial blogger addressing the topics of life insurance, annuities and retirement income planning.

Holly Mitchell  &

Holly Mitchell’s background in life insurance insurance goes back to 1985 when she worked for her father who was a New York Life agent. Holly has a marketing degree from Auburn University and has had a life insurance license since 2008. In addition to advising life insurance for customers all around the country, Holly is our website fact checker.

Rob Pinner   &

Rob Pinner is the founder and CEO of Pinner Financial Services servicing all 50 states. Rob started his insurance career in 2002.

Louis LaBash

Results-driven and innovative life insurance professional with 30 plus years of life insurance industry sales and marketing experience. Recognized as a pioneer in the field, leveraging phone and internet channels to exceed personal sales of over $100 million during the first decade of the 21st century. Creator of a highly effective intuitive IUL life insurance sales software that facilitated the sale of millions of dollars of indexed universal policies by numerous life insurance agents. Proven track record as a Managing General Agent (MGA), Life Agent, IUL Life Insurance Sales Software developer, and leading-edge creator of insurance marketing tools, educational content, and delivery systems.

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Many factors go into choosing the right life insurance company. Because life insurance is a long-term investment, you’ll want to be sure that you’re selecting a provider who will meet your needs.

You’ll also want a company with a proven history of financial stability. This is important for all types of insurance, but it’s especially vital for life insurance companies as you don’t have as much freedom to change providers as you would for auto or homeowner’s policies.

This makes doing research in advance all the more important.

Life Insurance Company Financial Ratings

When considering a new insurance company, you will, of course, want to review the company’s pricing, explore its policy offerings and read consumer ratings. You will also want to research the company’s financial health.

There are several resources that can help you accomplish this. By researching your company’s financial health, you can gain assurance that it will be there for you in the long haul.

Because there are so many options on the market, it can be mind-boggling. Thankfully, you don’t have to do it alone. Give one of our agents a shot and we can walk you step-by-step.

We are going to detail the life insurance company financial ratings and why they matter. We are also going to explore some different ways that you can get lower insurance premiums and guarantee that you’re getting the best life insurance coverage possible.

Why Life Insurance Financial Health Matters

It’s important to remember that insurance companies are actually investors. The money they collect in premiums is reinvested and grown so that the company can afford to pay out on their promises while continuing to pocket profits and pass dividends along to shareholders.

An insurance company’s financial health is one sign of how well it manages its money, and proper money management is vital in any investment business. You wouldn’t keep your money in a bank with poor financial strength; you should feel the same about your insurer.

The other reason that financial strength is vital for insurance companies is that you are trusting these companies to deliver on their promise. In the case of life insurance, you’re paying premiums in exchange for the promise that the company will take care of your loved ones after your death.

You need to feel secure that this will happen. If a company is financially vulnerable, it runs the risk of being unable to deliver its promise. Sites for Financial Ratings

Several rating agencies exist, and each one looks at slightly different criteria. By reviewing the ratings of a given company across all financial rating agencies, you can get a clear picture of the company’s overall health. Here are the sites you should reference:

AM Best Financial Ratings:

Founded in 1899, this is a credit-rating organization specifically geared toward the insurance industry. It’s the largest and most trusted of the insurance rating sites, and it provides information about the creditworthiness of insurance companies in the United States, Canada, and the United Kingdom.

It’s also the most thorough of the sites, and most insurance companies will be represented here.

Fitch Financial Ratings:

Founded in 1913, Fitch Ratings is one of the “big three” nationally recognized statistical rating organizations (NRSRO) designated in 1975 by the U.S. Securities and Exchange Commission. Unlike AM Best, the NRSROs focus on all businesses rather than just insurance companies.

Fitch is the smallest of the three NRSROs, but it often serves in the role of tie-breaker when reports are conflicting between Moody’s and S&P.

Moody’s Ratings:

Moody’s Investors Service was founded in 1909, and it’s a bond credit rating business. Designated as one of the nationally recognized statistical rating organizations in 1975, Moody’s is a go-to resource for identifying the creditworthiness of a company.

Standard & Poors:

Like Moody’s and Fitch Ratings, S&P is an NRSRO. It provides standardized financial strength ratings of businesses and provides valuable analysis of stocks and bonds. S&P was founded in 1860 and remains one of the primary sources of credit reporting for corporations.

Some insurance review sites will provide the ratings from all of these companies, which will save you some time when trying to find information on your own. Be advised that not every company will necessarily be listed with every agency, so a missing listing is not caused for alarm if the results are strong on another site.

Deciphering the Ratings on AM Best

Because AM Best is the only organization that focuses solely on the creditworthiness of insurance companies, it’s often the most useful resource when assessing the strength of a company. AM Best offers 15 separate credit ratings, ranging from A++ to F depending on the company’s financial health.

The ratings divide up as follows:

  • A+, A++: Superior
  • A, A-: Excellent
  • B++, B+: Good
  • B, B-: Fair
  • C++, C+: Marginal
  • C, C-: Weak
  • D: Poor
  • E: Undergoing regulatory supervision
  • F: In liquidation

Any company with a rating of B or below can be considered vulnerable, and it’s best to steer clear of these businesses until their financial rating improves. Whenever possible, it’s best to choose a company with an A or above ranking for maximum financial security.

You can also check the site to see what the financial outlook of a company may be; an insurer with a positive rating but a negative outlook might be a dangerous investment.

It’s always best to choose an insurer whose financial strength is long-lasting and secure; this will give you the greatest peace of mind in your investment.

Getting Affordable Life Insurance with High Rated Companies

Once you’ve found a company with a solid rating, you need to look for the company with the cheapest plans. Finding a financially stable company is only one portion of the search. Regardless of the company, there are ways you can entice lower premiums from the companies.

Some companies are going to put emphasis are specific categories, while others are going to be more focus on other factors. One factor which is shared by every company is tobacco usage.

You can get a quote from every insurance company in America. And the only similarity is that smokers are going to pay a lot more. Cut out the smokes.

You may prefer to get all of the quotes yourself. But the best way to round up the insurance quotes is to let one of our brokers do the work. Through the years, we’ve created relationships with more than 30 companies and can deliver their insurance quotes to you.

Doug Mitchell, CLU

Doug Mitchell, CLU

Doug Mitchell, CLU holds a BA degree in Finance from Auburn University as well as having obtained a Chartered Life Underwriter (CLU) designation from The American College in Bryn Mahr, PA. Doug has spent close to 30 years in the life insurance and financial planning industry and has held licenses to sell securities, long-term care insurance, health. Some other notable items about Doug: Top of the Table Million Dollar Round Table member (MDRT). (MDRT is a global, independent association of the world’s leading life insurance advisors) | Premier Partner with Lincoln Financial and Cabinet Member | Served two years as President of the Auburn/Opelika Association of Financial Advisors | Life Millionaire status at Horace Mann Insurance Company and was awarded the Life Agent of the Year Award | New York Life, Executive Council Member | Currently serves as President of Ogletree Financial, a life insurance General Agency. | Doug is also a financial blogger addressing the topics of life insurance, annuities and retirement income planning.

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