How to I pick a life insurance company?
How to I pick a life insurance company?
Approximately 1,000 life insurance companies provide life insurance in the U.S., but many belong to groups of companies and so they are not truly competitors with each other. Owning individual companies allows a group to sell its products by means of separate distribution channels, in order to more effectively fulfill the legally requirements of particular states, or simply to achieve other goals. It is estimated that about three hundred company groups exist in the U.S.
What is more, not every group has a company certified to operate in every state. Generally, you are advised to buy your insurance from a company licensed in your state, which will enable you to rely on your state insurance department to help if any problem should arise. In case of the insurance company becoming insolvent, your state’s life insurance guaranty fund will assist only policyholders of companies it has certified. To discover which companies are certified in your state, consult that state’s state insurance department.
There is a number of other points to bear in mind if you want to pick a company that will provide you with both reliable and affordable life insurance:
Product: most, though not all, companies provide a wide array of policies and options, therefore decide on a company that gives you the product and features that meet your expectations and needs.
Identity: names of life insurance companies may be confusing, and various companies may have similar names. Make sure you know the full name, home office location, and affiliation of any company you think is worth your interest.
Financial Solidity: life insurance is a long-term arrangement, so choose a company that seems to be financially stable for many years. You can do it with help of ratings from independent rating agencies.
Market ethics: certain life insurance companies follow to the principles and ethic codes of the Insurance Marketplace Standards Association, which is a nonprofit organization that promotes ethical practices in life insurance marketing.
Advice and service: for many customers, life insurance is a weird, complicated product, therefore it is helpful to deal with a company representative with whom you can communicate easily and who is aware of your needs.