The Best Life Insurance Company??
Life insurance is an important part of every family’s financial plan. For those people working with a financial planner, the planner will most likely choose or recommend a life insurance company and do all of the footwork to find a good one.
However, many people prefer to manage their own finances and trust their own judgement on which life insurance company is the right one for them. While reviewing life insurers, keep the following information in mind to help you identify the winners and filter out the companies that do not deserve your business.
Define “Best” Life Insurance Company
Defining the best life insurance company is a somewhat subjective exercise, because what is best for one person may not work for another. However, on a more general level, life insurance companies may be assessed based on a few important characteristics: company history, diversity of products and services, and financial strength and consistency.
The strength and resilience of an insurance company may be judged in some part by the length of its business history. Several of the top life insurance companies have been in business for over 100 years, weathering the Great Depression and many other financial ups and downs.
Products and Services
Another way to assess life insurance companies is to evaluate the diversity of products offered and services provided to clients. The better, more established life insurance companies offer a wide array of term and permanent life insurance options, with various riders available.
The goal of the insurance company should be to help its customers tailor life insurance coverage to meet their needs as closely as possible. Established life insurance companies usually offer annuities, long-term care and mutual funds in addition to life insurance, and are licensed to do business in all 50 states.
The most critical factor in assessing the quality of a life insurance company is financial strength and stability. This assessment is made easier by the major credit rating agencies: A.M. Best, Standard & Poor’s, Moody’s Investor Service and Fitch Ratings. Each life insurance company receives a letter score such as AA+ or BBB. Each rating agency provides a legend explaining what the letter scores mean.
The credit rating agency publishes the ratings periodically, and the publications can be found in most public libraries. Additionally, many life insurance companies show their financial ratings on their website, and several financial news outlets announce upgrades or downgrades of insurance companies as they take place. New York Life Insurance, offering term and permanent life insurance along with many other products, is one of the few life insurers to achieve the highest ratings from all four of the rating agencies.
Top Life Insurers by Revenues
Some people feel comfortable choosing a life insurance company that earns the most money. They figure, if the company is making so much money, they must be doing something right!
To this end, according to the Insurance Information Institute, the top five life insurance companies in terms of revenues for 2010 are MetLife, Prudential Financial, New York Life Insurance, TIAA-CREF and Massachusetts Mutual Life Insurance. Each of these companies offers a broad portfolio of other products in addition to life insurance.
Top Life Insurers by Number of Policies Issued
These insurance companies are ranked strictly by their life insurance sales rather than overall product revenues. The top five insurers, selling the highest number of term life insurance policies, are State Farm, American International Group (AIG), Direct General Life Insurance (Direct General Group), Citigroup and Allstate Insurance.
For permanent life insurance, according to studies from the Insurance Information Institute, the top five issuers were Liberty National, American International Group (AIG), UnumProvident Life, State Farm and AEGON USA Inc.
Life insurance companies have other characteristics affecting how well they serve their clients. Quality customer service, claims service and well-qualified agents definitely make a difference in how customers perceive a company’s effectiveness. When shopping for life insurance look for companies that make an effort to educate their prospective customers about all of the different options for life insurance.
This indicates the company offers a wide variety of insurance products. Conversely, if an agent represents a company that only has a few products to offer, they may try to fit every customer into a policy that does not completely meet their needs, which is a waste of the customer’s time and money.