Rating A Life Insurance Provider

Reader’s Question:

How can I check a life insurance company’s financial standing? And if ever that my life insurance provider here in California goes bankrupt, what will happen to my policy?

Irene

Anaheim, CA

You brought up some very interesting questions there! For your first question, you can refer to many companies and rating agencies on the web to run a search on the financial strength of companies falling under a particular industry. We recommend the following: J.D Power, A.M Best Co., Moody’s Investor Services, Weiss Research, Standard & Poor and Duff & Phelps.

Each of the said agency/company will have it’s own way or scheme of rating a particular company so it is best to understand first how they rated (which is not going to be a problem since they will make sure that people will understand the criteria used for the ratings). You should be able to check the financial rating of the particular life insurance carrier that you are interested to in. You can also use life insurance portals like this website to run a life insurance quote to determine which providers are offering the cheapest life insurance rates.

If you had the bad luck of choosing an insurance company that goes out of business in the future (which is rare), other life insurance carriers that are based there in California would have the responsibility of bailing-out, or buying-out the failing company (This practice is also done in all other states). The state’s insurance regulators would do their best to make sure that the affected policyholders would not lose their money. But usually, a larger life insurance corporation would take over on it’s own initiative.

Tips For Life Insurance Shopping

Reader’s Question:

This would be my first time to buy a life insurance policy and I would like to get some advice on what to do, and what not to do, when I look for a life insurance provider here in Pennsylvania.

Ortega

Erie, PA

Before setting out to get a life insurance policy there in Pennsylvania, it would be very important to identify your goals and requirements or your reasons as to why you would want to get coverage. Here are a few things to keep in mind while looking for a policy.

1. If employed, get a good idea if the company you work for includes group life insurance coverage as part of the coverage. If you see yourself working for that company for the next ten to fifteen years then it would be a good idea to find a life insurance package that would supplement your existing policy.

2. Life insurance policies are bundled packages, if you decide to get a policy with a death benefit of $240,000, why not bump it up to $250,000? You could actually get lower premiums if you buy higher.

3. Shop around. The Internet is a rich medium to get accurate and timely life insurance rates. By going through the quoting system of a few life insurance portals you would already get a good idea which companies offer the most competitive rates available.

4. If you have special circumstances regarding your health or medical condition, seek out a company that specializes on life insurance policies for those with diabetes, asthma or any other pre-existing illnesses. You could save up to half on premiums as compared to going with a general life insurance provider.