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Choosing The Insurance Company tips - What¡¯s the difference, To me as a consumer, Between a stock company and a mutual company? more about life insurance policy.

Choosing or Switching

  • What's the difference, To me as a consumer, Between a stock company and a mutual company?

    Not much. The main difference is that you will probably get dividends if your policy is from a mutual company. Most of the 2000 or so life companies are stock companies,

  • Who regulates the insurance industry?

    State Insurance Departments. So if you have a problem about life insurance that cannot be resolved with the insurance company, you should contact the State Insurance Department in your state.

  • What services examine and rate insurance companies?

    A.M. Best Company is the leading provider of financial information and ratings for life insurance companies. The A. M. Best book for life companies is available in many libraries or you can go to its web site (insurance-advice.net).

  • How do I interpret a rating?

    Each insurance service uses a different rating scheme so you should find out what the ratings definitions are for the service that you are using.

  • How important are "ratings"?

    Life insurance consists of promises you make to an insurance company (primarily to pay premiums) and promises it makes to you (mostly to pay the claim). Ratings of life insurance companies tell you how much

  • What is the "cost index"?

    Most states have now adopted the interest adjusted index method of cost disclosure as recommended by the National Association of Insurance Commissioners (NAIC) for comparing the cost of life insurance policies.

  • What happens when a company becomes insolvent and is liquidated?

    When an insurance company becomes insolvent, other life insurance companies that are headquartered or do business in the same state will rescue the faltering company.

  • How do I check up on a company's financial strength?

    A. M. Best Company, Moody's Investor Service, Standard & Poor's, Duff & Phelps, and Weiss Research are providers of financial information and ratings for life insurance companies. The A. M. Best book for life companies.

  • Should I worry about the company's financial soundness?

    Yes. There have been a few failures by life insurance companies in recent years. The percentage of companies that have failed is very small and most of the customers have eventually received what they were entitled to. But the delay, the worry, and t