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Is My Insurance Company Safe?

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In the current economic turmoil, you would be hard pressed not to worry about the state of your finances. If you have a life insurance policy, the questions that immediately spring to mind are whether your life insurance company is safe? And will it still be around to pay your beneficiaries when you die? These are valid questions that need answers and of late they are being asked more frequently than ever. With major insurance companies in the US all reeling under significant losses, there is worry and unease surrounding this industry both from within and from its millions of policyholders. To put it straight, the policy you purchased is only as good as the company you bought it from. If that company declares bankruptcy tomorrow, where would you stand?

There are a few assurances though. When determining whether an insurance company is safe, you need to check the ratings of the company as declared by organizations such as A.M. Best, Standard and Poors or Moodys (or even all three). These ratings are graded alphabetically with some going even as high as AAA. Some companies use pluses and minuses to indicate minute differences in the rating. But, any rating that is A- or above would be considered safe. A company with a lower rating than this would be termed as high-risk. Another option is to check www.thestreet.com. This is an independent insurance rating company that is also unbiased in its approach. Owned by a well-known consumer group, Thestreets ratings are extremely tough and objective with only 11% of insurance companies rated as excellent.

That said, ratings change continuously and the agencies can alter a grade at any point of time depending on the financial health of a particular company. So, even if you purchased a policy from a company that was rated A+ a few years ago, this may not be the same rating awarded to them today. In such a situation, if the rating has only fallen to a A- there is no real cause for concern as the difference between the two grades is negligible. As long as your company is rated A or above, claims will be paid out. In the event that the ratings have fallen lower than an A, monitor the company regularly. If you feel the need to move to another

life insurance company

, you should know that there will be surrender charges involved. Keep all this in mind before changing companies and never ever cancel a policy before the new one is in effect.

There are also measures in place by the government to protect

life insurance policy

holders.Most life insurance companies are regulated at a state level. The state ensures that adequate funds are in place in case an insurance company requires the same to meet with the demands of claim payments. If the company becomes insolvent, the State Guaranty Association will cover death benefit claims of up to $300,000. Check out the website of the National Organization of Life and Health Insurance Guaranty Association (www.nolhga.com) to study the funding limits of your particular state. In case of bankruptcy, all policyholders are covered by the rules of the state where they reside or where they bought the policy from (if they are residing abroad at the time).

About AccuQuote:

AccuQuote is a leader in providing

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to people across the United States. In 1986 it began operating with a single goal: to make the process of buying term life insurance as easy as possible for its customers. Their experienced professionals consistently deliver the most affordable term

life insurance rates

by comparing thousands of life insurance policies from dozens of top-rated carriers.

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