Life Insurance Company Ratings

Life insurance companies are ranked and rated in order to provide consumers with an opinion about the stability and solvency of one company judged against another. The reason that life insurance companies are rated in such a way is to make it easier for potential policy buyers to find the best premium to suit their current requirements at the most affordable price.

After all, every life insurance company can offer the same policies, but there will of course be large fluctuations in the pricing structure. What's more, one company may offer additional benefits on a particular policy where another company may not.

But it's not merely about pricing structure and added perks. Customer support is also taken into account in order to establish the rankings. Needless to say, it can be a very tricky and delicate business when interacting with family members of a deceased client. At times of grief and stress, customer service is extremely important, thus the reason why it is also used as part of the grading procedure.

It does become a bit complex however because the independent insurance rating institutions each use a slightly different set of criteria to create a scale. Furthermore, this criteria is very elaborate. Each rating is in fact unique depending on the rating institution.

There are a number of different independent rating institutions but the four most highly regarded are:

  • A.M. Best
  • Moody
  • Standard & Poor
  • Fitch

Because each of these institutions utilize their own unique way to calculate the ratings, there will be some confusion when trying to make comparisons, which is why there is also a ranking system in place.

The ranking system makes it that much easier for a prospective client to choose the appropriate company for his or her needs.

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