Life Insurance Company Rankings

As consumers, we are presented with so many arrays of products that it can be hard to make a choice at times. In order to cope with this deluge of information and details that are designed to whet the shopper in each one of us, we have developed our own methods of making our selection.

Our selection criteria are normally based on cost and quality of products. For commodities such as clothes, food, tools and many more, we place emphasis on a high level of standard at a reasonable price. In the event that we go for a product that has a higher or lower price than its counterparts, there is often a special criterion that we have evaluated in order to arrive at that choice.

The same kind of principle is also applied on picking our life insurance policies. As consumers, we have the right to expect that the company we choose to put our trust in is a solid and reputable one that will take care of financially empowering our loved ones in return for the premiums we have paid for, when the time comes for us to leave this world.

For this reason, we want to be affiliated with a strong and financially solid insurance company who can provide us with competitive packages and provide competitive compensation for our families in the future.

One way we can check if the insurance firm is a reliable insurance provider or not is by checking the life insurance company ranking it is accorded with, compared with the other top-caliber firms offering the same range of insurance plans.

Most rankings are based on information that comes from the top financial rating institutions such as A.M. Best, Moody’s, Standard and Poor’s (S&P), and Fitch. These rating bodies provide information regarding the future financial outlook of an insurance company and its capability to meet insurance and economic demands. The following tables show some ratings given by these companies including a brief explanation of each:

A.M. Best Rating

Description
Definition
A++, A+    Superior     Able to meet insurance obligations
A, A-         Excellent    Able to meet insurance obligations
B++, B+    Good          Able to meet insurance obligations
B, B-          Fair            Vulnerable to unfavorable economic conditions
C++, C+   Marginal    Vulnerable to unfavorable economic conditions
C, C-        Weak          Very vulnerable to unfavorable economic conditions
D              Poor           Extremely vulnerable to unfavorable economic conditions
E              Under Supervision    Company is under regulation, preventing normal business operations
F              In Liquidation    Company is ongoing voluntary liquidation
S              Suspended    Unevaluated due to inadequate information or lack of cooperation

Moody’s Rating

Description
Definition
AAA    Extremely Strong    Market conditions are unlikely to affect a fundamentally strong position
AA      Very Strong             High-grade company with marginally larger long-term risks
A        Strong                     Financially secure, but signs of possible long-term susceptibility
Baa     Adequate                Lacking in certain protective elements over the long term
Ba      Questionable           Ability to meet obligations is questionable
B        Poor                        Long-term ability to meet obligations on time is small
Caa    Very Poor                May be in default of financial obligations already
Ca      Extremely Poor       In default of financial obligations
C       Extremely Poor       Very poorly positioned to offer financial security

S&P Best Rating

Description
Definition
AAA    Extremely Strong    Very unlikely to be affected by adverse economic conditions
AA      Very Strong            Unlikely to be affected by adverse economic conditions
A        Strong                    Marginally more likely to be affected by adverse economic conditions
BBB     Good                      May be affected by adverse business conditions
BB      Marginal                 Adverse business conditions may lead to inability to meet obligations
B        Weak                      Adverse business conditions are likely to affect ability to meet obligations
CCC   Very Weak              Depends on favorable business conditions to meet obligations
CC     Extremely               Likely to not meet all financial obligations
R       Regulatory Action   Subject to regulation due to insolvency
NR    Not Rated                No opinion

Fitch Rating

Description
Definition
AAA    Exceptionally Strong    Very unlikely to be affected by adverse economic conditions
AA      Very Strong                  Not significantly vulnerable to adverse economic conditions
A        Strong                          Low expectation for interruption of payments
BBB     Good                            May be affected by adverse economic conditions
BB      Moderately Weak          Contractual obligations are now vulnerable
B        Weak                            Significant risk for interruption of payments
CCC   Very Weak                    Strong likelihood for interruption of payments
CC     Extremely Weak           Interruption of payments is probable
C       Distressed                   Interruption of payments is imminent

The secret to finding a reliable insurance partner is to make sure that you are aware of the company’s financial rating and ranking in the service it provides to policy owners. The ratings that are assigned to these insurance companies are very significant because they are the consumers’ assurance that the company is able to pay when you file claims and provide your benefits to your family in the event that something untoward happens to you.

So before you sign on as a policy owner for that particular insurance company you have been eyeing, check out the its ratings over the Internet, test this with the broker or agent, and then base your judgment on the summary. Do not go for a company that has a questionable ranking and grade. It is your money and life that are on the line so make sure you only go for the best and most secure company for your benefits.