There’s no greater motivation for putting a protection plan in place than for those you love. Among the decisions you need to make when buying life insurance is what company to choose. Here are some tips to help you find the right insurance company for you, your family, and your situation.
1. Don’t Buy Solely on Price
Everyone wants a competitive premium, but the cheapest policy is not always the best value. Before deciding, look at what you’re getting. Features such as cash value, guarantees, policy flexibility, living benefits, and return-of-premium provisions can make a difference over time. A policy that appears more expensive today may provide considerably more value down the road.
2. Expect the Final Price to Change
Most life insurance quotes are preliminary. The rate you see initially is based on limited information. Once the carrier completes underwriting and reviews medical records, prescriptions, labs, and other risk factors, the premium can change. Having alternatives gives you options if one carrier comes back less favorable than expected.
3. Look at Financial Strength
Life insurance is a long-term promise. If you’re purchasing coverage today, you want confidence the company will be there decades from now when your family needs it. Independent rating agencies such as A.M. Best, Moody’s, Fitch, and Standard & Poor’s evaluate the financial strength of insurance companies. Companies will generally post their ratings on their website. Each rating firm uses a different scale, but generally you want to look for a rating in the A range.
4. Evaluate Each Company’s Menu of Offerings
Not every insurance company excels in every product category. Some carriers are known for whole life. Others are strong in term insurance, indexed universal life, variable universal life, or long-term care solutions. Certain companies also target specific professions or market segments. The best company for your neighbor may not be the best company for you.
5. Pay Attention to Service
You want to work with a company that is going to provide good service and support. Claims service, customer support, policy maintenance, and responsiveness matter. One way to evaluate a carrier is by reviewing complaint information maintained by the National Association of Insurance Commissioners (NAIC). NAIC is a regulatory support organization for state insurance commissioners, dedicated to protecting consumers and ensuring fair, competitive, and healthy insurance markets.
6. Consider Using a Mutual Company
Many people are surprised to learn that some insurance companies are owned by shareholders while others are owned by policyholders. Mutual insurance companies operate for the benefit of their policyholders. Depending on the company and policy, policyholders may participate in the company’s success through dividends. While dividends are never guaranteed, this ownership structure can be an attractive feature for long-term policy owners.
7. Leverage Experts
Life insurance is more complicated than most people realize. An experienced advisor can help you compare carriers, evaluate product design, understand underwriting differences, and avoid costly mistakes. More importantly, they can help match the right company and policy to your specific goals rather than simply recommending the lowest premium.
We hope you find this list helpful and consider using it as a catalyst to either purchasing life insurance for the first time or reevaluating the coverage you currently have to ensure it still meets your protection needs.
If you have questions about which type of insurance company may be right for you or how much coverage makes sense for your situation, a qualified financial professional at Barnum Financial Group is ready to help.
