Those who need or want life insurance usually search for the cheapest plan they can get. But is cheaper necessarily better if the company offering the plan is untrustworthy?
Just remember the old wise saying: you get what you pay for. A cheap life insurance plan may cause headache, heartache, and lots of trouble down the road if a claim has to be made for benefits. Why? Many insurance companies receive a plethora of complaints and low ratings from rating agencies, making them less desirable. How do they deserve low ratings? It could be one or more of any of the following:
- Inadequate financial reserves and company assets
- Poor customer service
- Numerous consumer complaints
- Poor record of claims payout
For this reason it is important that you do your homework on the company as well as the cost of life insurance. When you look for a good life insurance plan look to these resources on insurance company information:
Insurance Ratings – Each insurance company is rated on its financial strength and ability to continue and perpetuate business. There are many different agencies that rate insurance companies, and each one has a different rating system. But you can be sure that by checking the major agencies such as A.M. Best, Standard & Poor’s, or Fitch ratings, you can get a good picture of the strength of an insurance company.
State Insurance Board – Each insurance company doing business in a state is required to be licensed by the state insurance board. Check with them about any consumer complaints and whether the company is even licensed to do business.
A little bit of research on a company from whom you want to purchase life insurance can save a great deal of heartache in the future. Be sure to know your insurance company before buying a policy of any kind.
