What are Life Insurance Rating Companies?

Many people give the World Wide Web the credit for the existence of Life Insurance Rating Companies. While the internet has given the consumer quicker access to them, Life Insurance Rating Companies have been around for over 100 years.
A Life Insurance Rating Company is an independent organization that assigns a rating to an Individual Insurance Company in order to rank them and give consumers a better idea of where they should be looking to meet their insurance needs. The rating companies are similar to other organizations that provide detailed information and rankings on other types of financial institutions and corporations.
Rates are an important factor in the rating process just as they are so often an important factor in an individual's choice. Rates alone do not give a complete picture of the overall value of the Company, however, and reliability, stability, customer service, and many other factors are computed into the rating process. Even with all this done, there is no way to name the absolute best Insurer for any given situation or for any individual prospective client. Usually, the Rating Companies will give a list of their top 10 or top 15 choices. The idea is to narrow the shopping range, not eliminate the need to shop around.

Obviously, a Life Insurance Rating Company must be beyond reproach in its own reputation and independence. If the ratings were based on who was paying the Rating Company the most money, we would have little faith in them. The best ratings companies have established themselves as not only trustworthy, but also knowledgeable in the field of Insurance. Usually, their income is derived from many sources such as the sale of informative books and the holding of seminars concerning the Insurance Industry. The publishing of Insurance Industry related news is another common activity for the rating company.

The individual consumer has reaped the benefit of the Life Insurance Rating Companies devotion to improving the standards of the Industry. The Insurance Industry is a highly competitive business and a Company simply can not afford to have a bad rating. Since the ratings are based on competitive pricing and customer service, any Company that is interested in improving their standing will be forced to raise their standards and keep their rates in line.

Access to the Life Insurance Rating Companies has been made easier by the advent of the internet. It is possible to compare the results and ratings of several Rating Companies from the comfort of home. The rating companies are using complex software programs that can be used to enter your own personal information and get back tailored ratings for your own individual situation.


Barry Waxler is a financial advisor at UFCAmerica.com.