Buying life insurance is a big commitment and the application process can be lengthy, but you are relying on the financial soundness of the life insurer to ensure that it will live up to its obligations should you pass.
Fortunately, there is a method for gauging an insurer’s financial strength and you should keep that in mind when it’s time to purchase a policy. Just like you would read reviews of a product you’re thinking about buying online, you can also do your homework on the ratings of the life insurers you are looking at.
Life insurance ratings are a picture into the financial soundness of the carrier and its ability to meet its claims-paying obligations.
There are a number of ratings firms that analyze life insurance companies’ finances in minute detail and then give them a letter grade to reflect their soundness. Understanding these ratings will give you confidence in choosing an insurer that you can rely on to pay its claims, if need be.
There are four main ratings agencies, and they each have their own method for generating ratings to the same insurer. What Do Life Insurance Company Ratings Mean and Do They Matter