How do I compare whole life insurance companies?


Purchasing whole life insurance is just like making a commitment for life. This is why you need to be very careful when selecting the insurance company to buy whole life insurance from. You should make sure you opt for a financially sound insurer that is guaranteed to be around and pay the claims even when you are gone.

Tips for Comparing Life Insurance Companies

With over 1,600 companies offering life insurance in the United States, this might seem a daunting task at first. This is where rating organizations come into play to help consumers make the right choice.

  • You can use the Internet to select a life insurance provider, but if you see you are going nowhere with that, you should consider contacting a financial consultant.
  • Do not make the mistake of comparing only two companies.
  • Check the financial strength of the insurer by seeing where they stand in the life insurance rankings, and make sure you opt for a top insurer. Contrary to common belief, the best insurers are the ones that usually offer the most competitive rates.

Who Are the Rating Agencies

Five rating organizations evaluate and grade life insurance companies on their financial soundness. All these agencies are very protective of their public reputation of credibility, and are assumed to provide objective rating services. Consumer experts recommend that an insurer gets a high rating from at least two of the rating agencies in order to be considered financially reliable. Here are the major life insurance rating agencies (note that they use the A-F system of evaluating insurers):

  • Best: You can enter the name of the insurer in the "Search ratings" box and in addition to an up-to-date rating, you will receive the company's full history. The following are Best's high ratings: A++, A+, A.
  • Standard and Poor's Corporation (S&P): the highest insurance company ratings are AAA, AA+, AA, AA-.
  • Moody's: highest ratings - Aaa, Aa1, Aa2, Aa3.
  • Fitch: the highest insurer financial strength ratings are AAA, AA+, AA, AA-.
  • Weiss: the highest ratings are A+, A, A-.
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