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Posted on October 7, 2009 by Denise | Posted under Insurance
Is My Insurance Company Safe?
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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 Poor’s or Moody’s (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 thestreet.com This is an independent insurance rating company that is also unbiased in its approach. Owned by a well-known consumer group, Thestreet’s 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.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 The Author: About AccuQuote:AccuQuote is a leader in providing term life quotes 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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