Criteria to Compare Life Insurance Companies Ratings
All life insurance companies are different. From their prices to their customer service and the policy benefits to the long term options, everything is different. It is because of this that you must compare life insurance companies ratings, benefits and features before even choosing the provider that you want to use for your life insurance needs.
In order to compare the ratings set by other companies, what customers and rating agencies have to say will benefit you a great deal. Not only will these ratings tell you how good they are as an organization, they will also give you an idea as to which provider offers the best policy for the money. Since every company is different you can’t just choose to buy a policy based on price alone as this number will often times skew the comparison that you are trying to accomplish.
The Ratings You Can't Ignore
- Price – As with any comparison, you must look at the price to see how much it is and what the company offers for that policy. Every provider is different and they will have slightly different prices, but these subtle differences could make a huge impact depending on what features and benefits come along with the policy.
- Financial Strength – Do you know the way to tell the financial strength of a company? First, you could just look online or on their website, or you can determine the strength by going to a rating company such as; A.M. Best, Standard & Poor and Moody’s. All of these are very well respected in the financial industry and will tell you everything from the companies, profitability, debt and liquidity. The highest rating an insurance provider can get is A++, so if the company has that, then you know they are strong financially.
- Company Stability – Do you know how stable the provider is that you are thinking about using? If not, then it is time to figure it out. The reason corporate stability is so important is because you don’t want to have to worry about your policy getting sold to a different company or even losing its value due to corporate volatility. Many companies that are publicly traded on the stock exchange will be less stable than those who are owned by the policy holders.
- Customer Service – One of the most common industry comparisons you will see online will deal with the customer service of that company. This is a great rating to use as the agents will be the ones that do everything for you and even deliver the death benefit when that time comes. If the customer service is bad and most people agree about that, then there is no point to even consider that particular company. Be careful, however, to take online complaints with a grain of salt as well. If a couple of people have a bad experience in comparison to thousands of satisfied customers, these complains may represent only an isolated instance.
Comparing life insurance companies ratings is much different than comparing the policy by itself. One of the reasons why you must compare the individual ratings as well is to make sure that they are sound and not a fly-by-night operation. You need to understand that some companies will pop up out of nowhere to offer very cheap policies, however, it is imperative that prior to choosing them you determine whether or not they will be around in 5, 10 and even 50 years.
Life Insurance & Annuities as an Investment Strategy – Comprehensive Checklist
Anyone who is considering the use of an annuity or a life insurance policy as a part of their investment strategy already knows that there are several types to consider. So many choices can mean almost certain confusion, especially for the first-timer who is trying to make the best financial decision for their family as well as their own financial health.
Choosing the right life insurance policy or annuity for your investment needs can be a lot less of a chore when there is a checklist of items to be considered prior to making a decision.
When trying to decide about using an annuity or life insurance policy as an investment vehicle, there are several factors to consider.
The Annuity Checklist
- Interest Rate - The interest rate of the annuity is very important, especially if the annuity claims to have a fixed interest rate. Sometimes, this rate can decrease over time, which means that a fixed annuity can actually be a banded rate annuity in disguise. Finding a company that offers a 'no surprise' approach can be a great help.
- Proper Structure - Ensuring that your annuity will adequately provide for your beneficiaries is another consideration that should be made. Every annuity has three parts: the primary beneficiary, the owner and the annuitant. The primary beneficiary receives the annuity should the annuitant pass away. The owner has control over the investment. And the annuitant is the individual's life that the annuity is based upon.
Usually, the same person is listed as owner and annuitant. But annuities can be either owner or annuitant-driven. Checking these differences will help you to ensure that your annuity goes to whom you intended should you pass away.
- Broker Qualifications - Many will use the same person for their annuity as they do for their financial planning. But many don't check whether that individual is a certified financial planner, which they should be if they are dealing in annuities.
The Life Insurance Checklist
- Surrender Fee - When using life insurance as an investment vehicle, particularly a whole life policy, there may be a surrender fee involved. This will usually occur if the policy owner wishes to cash out their policy when they retire, for the purpose of supplementing the income they may already be receiving from their retirement. The amount of the fee will depend on the amount of the policy and the insurance company, but this fee should be taken into consideration if the policy owner intends to cash out at some point in the future.
- Future Affordabilty - Another thing to consider is your future ability to get affordable insurance. Many times, those who use life insurance as investment vehicles are unpleasantly surprised when they are unable to get coverage due to too-high premiums. If this is a major concern, experts advise comparing the use of a policy having a guaranteed renewable term with how much a whole life policy will cost.
- Tax Brackets - Which tax bracket you fall into is a definite consideration when choosing a life insurance investment vehicle. This is because how much benefit is obtained from a tax deferral will be directly related to the tax amount being deferred. Your benefit's value will raise the higher you find yourself in a tax bracket.
While we may all want an easy answer to life insurance and annuities as investments, there is no single right answer, as there are pros and cons to using each strategy. But in weighing all aspects carefully, an informed decision can be made about your financial future.
Any life insurance companies you see listed on our site are guaranteed reputable, high quality resources for you to select the right plan and policy type for your particular situation. We have helped you by doing much of the legwork in this important, individual decision.
The best place to begin is to compare life insurance companies by looking at various types of policies, as well as the rates available. You'll also want to understand what your goals are. A whole policy may be more of a long-term investment, whereas term coverage is meant as a safety net for a specific term.
Finally, you'll want to know what options you have for life insurance companies in your state. As you drill down to narrow your choices, you'll be able to find some candidates that truly meet your needs and budget.