November 23, 2022
  • November 23, 2022

This matters more than premiums when choosing life insurance

By on July 13, 2022 0

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Purchase life insurance can be complicated. Consumers have to choose between term life insurance vs whole life insurance and make decisions about the amount of the death benefit. They also have to shop around with different insurers to find the right one.

When comparison shopping during the policy buying process, many people focus primarily or solely on premiums. This is the monthly amount the policy owner will need to pay to keep the coverage in force. It certainly makes sense to make sure the premiums are affordable, otherwise the policy could expire if not paid.

But, while insurance buyers need to make sure their life insurance coverage fits their budget, most people generally shouldn’t decide which insurer to work with based on price alone. It’s because there’s something even more important to watch.

This is the most crucial consideration when buying life insurance

When buying life insurance, the most important thing to think about is whether the insurer has a good reputation. Specifically, it is important that the insurer is financially stable and that the company pays claims efficiently and quickly without too much hassle.

You see, life insurance policies pay out in tragedy. Surviving loved ones don’t want to have to fight an insurer who wrongly denied a claim. They don’t want to have to jump through hoops trying to get paid out of a state guarantee fund if the insurer has gone bankrupt and can’t pay claims. And they don’t want to wait months and months while bills pile up to get money from a late-paying insurer.

It is important to find an insurance company that will be financially solvent for the foreseeable future and that will quickly pay out the money surviving family members need to pay funeral expenses and cover other expenses that the deceased person’s income would normally have paid for. This way the insurer can provide the very crucial protection that the policy was purchased to provide in the first place.

How to Find a Life Insurer with a Good Claims Handling Reputation

Finding an insurer with a good reputation for handling claims is going to take a bit of research.

Checking AM Best Ratings can be a good idea, as AM Best is a rating agency that specializes in rating insurers. A solid AM Best rating shows that the insurance company will likely have the money to pay for claims that arise in the future.

JD Power also rates life insurance companies on claims handling and customer service, which can be a useful resource for knowing which insurers people are happy with and which have caused problems. And the National Association of Insurance Commissioners also maintains a database of complaints which may be useful to review.

Data from the Better Business Bureau can also show whether complaints have been filed and how the insurer has responded to them. And the BBB website also contains customer reviews and assigns its own rating.

By taking the time to review all of these resources, policyholders can ensure that the life insurance coverage they purchase will be there to support their loved ones in the event of their death.

The Ascent’s picks for the best life insurance companies

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