UPDATED: Mar 26, 2020
We strive to help you make confident insurance decisions. Comparison shopping should be easy. We partner with top insurance providers. This doesn't influence our content. Our opinions are our own.
According to The Statistics Portal, in 2013 there were 850 U.S. life insurance companies. That’s nearly 1,000 to choose from. So it wouldn’t surprise me if you feel dazed and confused as you try to figure out which one is best.
Companies that sell life insurance have a multitude of similarities and differences. So what should you zero in on as you compare and contrast them when deciding which one to purchase a policy from?
As you investigate which life insurance company will be the best fit for you, consider these things:
The Company’s Financial Stability
Check out how credit rating sites like A.M. Best and Standard & Poor’s (S&P) have rated the life insurance companies you’re interested in. If a company is rated poorly, it could indicate that down the road it might not be able to pay out the death benefits on the policies it has sold. According to Tim Bain at QuickQuote, “Look for an A rating or better. There’s typically not a significant difference between an A+ and an A rating, so in that situation, you’re usually safe going with the best price.”
Leniency for Certain Situations and Conditions
No one is perfect. Yet some life insurance companies seem to be seeking applicants who are nothing less. If you have a particular medical condition or some other risk factor (examples: high cholesterol, high blood pressure, traffic violations, etc.), you’ll have more options and flexibility if you find a life insurance company with more lenient guidelines for those types of things.
Brand Names Aren’t Always the Best.
Just because a life insurance company has become a household name doesn’t mean it’s the best of the best. A lot of money goes into the advertising and marketing efforts of those large companies, which means you might find you’ll pay more for their policies (They have to recover that money somehow, right?). As I mentioned earlier, pay attention to company ratings rather than how good their TV commercials are.
Realize that your coverage amount or term length for term life insurance needs may change over time as your life evolves. Some life insurance companies make it easier than others do to make modifications to policies. Always find out up front what’s involved in increasing and decreasing coverage and changing term lengths.
Customer Support and Online Account Management
Do the companies you’re considering make it simple for you to educate yourself about life insurance and the options available to you? You can save yourself a lot of time by looking for life insurance companies that offer online tools to help you calculate your coverage needs, find answers to questions, get a preliminary quote, and that enable you to view and manage your account after you’ve purchased a policy.
Buying life insurance is a big deal, so put some thought into not only the type of policy you buy but also the life insurance company you buy it from. As you look into your options for giving your loved ones’ financial security, make sure you get the additional peace of mind of knowing you’ve done your research and have made a wise choice.
If you need a little help weighing the options, talk with a life insurance professional who can answer your questions and guide you to the most reputable and reliable companies.