Choosing a life insurance company is not a simple task, as many of us tend to believe. Keep in mind that purchasing a life insurance policy is a significant investment for your loved ones. Therefore, you need a life/death insurance company that will hold your hand along the way and assure you that everything shall be okay should the unexpected happen.
With more than 1,000 life insurance companies selling their products in the US, you need to be careful with the one you choose to do business with. After all, unlike homeowners or auto insurance, you won’t be renewing your life insurance policy annually and hopefully, there won’t be any claims on it for many years.
In this post, we discuss some of the crucial things you need to look for in a life/death insurance company and how to identify the best company. So, let us get started.
1. Company’s reputation
Basically, you want to trust and rely on a life insurance company that you choose. Therefore, the first thing you need to do is to check its reputation. One of the critical things you should pay attention to is how the insurance provider deals with claims.
To find out how the company has been performing on this front, check with relevant government agencies, insurance commissions, and the BBB rating. You can also seek views from friends and families who have had dealings with the company.
2. Financial strength ratings
A company’s financial stability is another critical thing you need to consider when looking for a life insurance provider. Four independent agencies rate the financial strength of life insurance companies. They are A.M Best, Moody’s, Standard & Poor’s, and Fitch Ratings.
The financial rating is usually based on a company’s financial strength and its ability to meet its financial obligations. The rating is also based on a comprehensive evaluation of a company’s operating performance, balance sheet strength, and overall business profile.
Each agency has its own rating standards and process by which it operates. Therefore, it is always a good idea to check a company’s rating at two or three of these agencies before you decide whether or not you are going to purchase your life insurance policy from them.
3. Products offered
Term and permanent life insurance policies are the two main types of life insurance products that insurance providers offer. A significant number of people prefer carrying both, while others prefer purchasing just one.
In most cases, people choose the term life insurance because it is straightforward and relatively cheap in terms of monthly premiums.
If you are looking to purchase a life insurance policy, go for a provider that specializes in life insurance products. That way, you can be sure that you are working with a seasoned company that will offer you excellent service.
You can even request the company to customize your life insurance policy to fully protect your loved ones without breaking your bank.
4. Conversion options and privileges
You should also take time to learn about the company’s conversion options for term policies. Keep in mind that most of the life insurance policies sold out there are term policies. This means they provide you with coverage at a fixed monthly rate for a specified amount of time.
For instance, if you purchase a 20-year term policy and you outlive it, the provider will simply keep the premiums paid, and that is it. Term policies are a good option for young families because they are relatively affordable.
However, it is short term and won’t pay out like a long-term whole life policy. This is where the conversion feature comes in handy.
Some term policies have a conversion feature that lets you change your policy from being a term to whole life. A whole life policy guarantees you coverage over a long-term.
Therefore, having a conversion feature as part of your life insurance policy is quite essential because it allows you to change your policy without having to re-qualify or take a medical examination.
5. Competitive rates
For some individuals, the bottom line to choosing a life/death insurance company boils down to the competitiveness of their rates.
Technically, if two providers have a good reputation, strong financial rating, specialize in underwriting life insurance policies and provide conversion options, then choosing a company with competitive rates makes sense.
Insurance Master Assurance
At Insurance Master, we only work top-rated life insurance companies that offer exceptional services. If you choose to purchase your life/death insurance policy through us, you can be sure that you will be working with a reputable company with a history of stability.
Our licensed insurance agents are knowledgeable about different insurance products available on the market and are ready to help you determine the type of coverage ideal for your unique situation.
Contact us today and let us help you with all of your life insurance needs.