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How to Choose a Life Insurance Company: 5 Questions to Ask
Hundreds of life insurance companies operate in the United States, from big names to small regional companies. Most of them offer similar types of life insurance, such as term, comprehensive, comprehensive, and variable life insurance.

How do you choose between them? Here are five questions to ask about the company before you buy.

How strong is the company financially?

It is important to choose a financially strong life insurance company. You want the company to be there to pay death compensation to your benefactor, whether he dies after five or 30 years.

Look up financial strength ratings to see how stable the company is. Independent rating companies, such as A.M. Best, Fitch Ratings, Moody's Investor Services or Standard & Poor's Ratings Services issue scores to insurance companies. Please note that each company has its own rating system. A + is the second best rating from A.M. The best and fifth best ratings from Fitch. You can view reviews for free on company websites, but you may need to register first.

Don't judge the stability of a company by its size. Most of the major life insurance companies have been around for a long time, some for more than 150 years, but many small and medium-sized businesses have been in business for a long time and have a strong record of meeting financial obligations, according to Life. Industry Group Happen.

What is the company registration?

Check with the state insurance department to get an idea of ​​how well the life insurance company is serving its clients and keeping its promises. Insurance departments, charged with regulating the insurance industry, track and investigate complaints they receive against insurance companies. These may include disputes over claims, cancellation of policies, premiums, misrepresentation of sales, or other issues. Most departments publish reports on their websites, showing the number of complaints each insurance company has, relative to the number of their clients.

You can also search for information on complaints, licenses, and financial information by company on the website of the National Association of Insurance Commissioners.

What products are available?

Review the company's life insurance products to make sure they offer a good assortment of the type you want to buy, be it permanent or long-term life insurance, such as whole or comprehensive life insurance.

Some insurance companies offer innovative products that may appeal to you. For example, John Hancock has comprehensive, general life policies that include a discount if you exercise and use a Fitbit tracker to prove it.

Is an insurance company a joint venture?

Unlike publicly traded insurance companies, which are owned by shareholders, mutual life insurance companies are owned by policyholders. As a result, if you buy a life insurance policy through a joint venture, you can receive dividends, a portion of the company's surplus income.

Each year, the board of directors of the joint venture decides how much distribution to distribute to policyholders in the form of dividends. You can get your cash, use it to pay off policy loans, or apply it to your installments.

Please note that lifetime policies are not eligible for dividends, and dividends are not guaranteed even for permanent policyholders. Whether the company is paying dividends shouldn't be a factor in your decision, but it is something to understand when comparing insurance companies.

How do you compare prices?

Underwriting Guidelines vary widely by company. These insurers use them to determine if they will sell you the insurance policy and how much to charge. If you are turned down or a company is offered exorbitant fees, you may have better luck with another company. Compare life insurance rates among various competitors to see how they stack up.