Choosing the right insurance company to buy any type of insurance plan can be tricky and confusing, particularly that there are many of them in the country. However, we are here to help you choose the best one that suits your needs and abilities by answering the following 5 questions.
HOW FINANCIALLY SOLID IS THE INSURANCE COMPANY?
For your life insurance to be able to cover the death benefit of your beneficiary while you die either in 5 or 30 years, the insurance company from which you bought the insurance must be strong financially, and you can have a look at the financial strength of the company to know that.
Actually, several independent rating firms depend on some factors to rate insurance companies, such as Moody’s Investor Services, Fitch Ratings, and A.M. Besides. Keep in mind that every firm holds its own rating system. While you may be asked to register, you may still able to view the ratings online for free.
Moreover, never judge the stability of a company based on its size but rather by its history of meeting financial obligations.
WHAT IS THE COMPANY’S TRACK RECORD?
To know how well the insurance company is, you need to know how well the services the company provides to its customers and to what extent it keeps its promises. To do so, consider consulting your state insurance department, which is responsible for regulating the insurance industry by monitoring and investigating the complaints they receive against insurance providers.
In most cases, complaints are about sales misrepresentations, premiums, policy cancellations, disputes over claims. Many departments display reports online about every insurance company with the exact number of complaints customers file against them.
Furthermore, you can consult the website of the National Association of Insurance Commissioners to check up the financial, licensing, and complaint information about every insurer.
WHAT ARE THE AVAILABLE PRODUCTS?
Usually, a good insurance company must have a wide variety selection of insurance products that can attract the attention of customers and also provide different discounts that can encourage people to subscribe to this company.
IS THE INSURER A MUTUAL COMPANY?
Different from publicly-traded insurance companies that are owned by stockholders, mutual life insurance companies are owned by their policyholders. Therefore, choosing a mutual company to purchase a permanent life insurance policy, can allow you to benefit from dividends, which are a share of the surplus revenue of the company.
Every year, the board of directors of a mutual company decides on the number of dividends to offer policyholders, which you can use toward premiums, to repay policy loans, or take them in cash.
However, don’t make your decision relying on whether the company pays dividends, but only consider this factor when comparing between different insurance providers.
HOW DO THE RATES COMPARE?
Typically, insurance providers use “Underwriting guidelines” to decide whether to sell you a policy and the amount to charge you for this plan. However, this procedure differs from one company to another, meaning that if you aren’t approved or you are not satisfied with the rates you are charged with, you may have good chances with another company.
Remember to compare life insurance quotes from different competitors to have a better and larger view of each one of them. Moreover, keep in mind that different companies might have very similar names, so, don’t confuse them.