How to Choose a Life Insurance Company

Having trouble narrowing down the many life insurance providers out there? Here are some tips to help you find a life insurance company that meets your needs.

man holding insurance agent card

Choosing the right life insurance provider can be a headache. It’s a nuisance going over many individual quotes from multiple companies. And what makes one life insurance company better than another? QuoteWizard wants to help consumers quickly and easily find a life insurance policy that works for them, so we have produced a guide to help you choose a life insurance company that’s right for you.

Speak to an Agent and Seek Quotes

With life insurance quotes pining up from many different companies, it can be quite overwhelming to determine which one is right for you, especially if the companies give you similar quotes. Luckily, there are agents, brokers, and direct providers who are trained and ready to answer your life insurance questions.

Insurance agents are go-betweens for the insurance company and the consumer. They are employed to help you find the best policy and or provider for your needs. There are captive agents and independent agents. Captive agents represent, and work for, one insurance company, while independent agents represent more than one company.

Insurance brokers are independent in that they don’t work for a specific company. They will most likely have broader knowledge of the policies offered by the various insurance providers than will a captive agent but you often pay more because they collect commissions on the policies they sell. Direct providers are insurance companies that will sell you their policies directly, usually over the phone or internet.

Whether to seek one of these insurance liaisons depends on how far in your life insurance search you have gotten. If you already have an idea of the company you want to go with, you might choose a captive agent or direct provider.

Whatever you decide, it’s always wise to shop around and seek quotes before you choose a company. Luckily, QuoteWizard has a nationwide network of licensed insurance agents to help you choose a life insurance policy.

Check the Company’s Reputation

Acquiring your life insurance policy through a reputable company is one of the most important parts of buying life insurance. There are a few different ways you can obtain information about a company’s financial ratings and reputations.

Credit Rating Agencies

One way is by consulting with credit rating agencies who can disclose valuable information about the financial stability of an insurance company. Independent ratings agencies such as Standard and Poor’s, Moody’s, A.M. Best, and Fitch can all provide this type of information.

Each agency provides their credit ratings using a different formula, and has different criteria for assigning scores. Because of this you should not use the same criteria to compare scores, and should look at multiple agency’s scores.

It is valuable to look at an insurance company’s credit rating if you are going to be purchasing a policy from them. You want to ensure that the company you choose is financially sound and will be around in the future.

Customer Reviews

When searching for the right life insurance company, you want to go with a provider that gets high marks for customer satisfaction. You can read customer reviews on individual insurance company’s pages, as well as search websites such as The Better Business Bureau, which provides business and consumer reviews on over 4 million companies.

Licensing

Just as with auto and homeowners insurance, the life insurance company you choose also should be licensed by your state. You can find out whether a life insurance carrier is licensed by your state by going to the website of the National Association of Insurance Commissioners (NAIC), or the website of your state’s insurance commissioner.

Policies Provided

Life insurance policies can have multiple components. Because of this, it is important to check to see if the various companies you might be interested in can provide a life insurance policy with the features you are looking for.

You want to ensure that the companies you are interested in can provide you with term life insurance for the number of years you want to purchase it for, or a universal life, or whole life policy with exactly the features that you want. (Click here to learn more about the many types of whole life policies that exist.) Most companies provide a wide range of policies to choose from, but it is wise to make sure the company you’re interested in can give you the coverage you’re looking for.

Affordability

Possibly one of the most important aspects of choosing a life insurance provider is finding the provider that offers the most affordable rates for you. You want to find a provider that will offer you lowest premiums, while still providing the coverage that you need.

The best way to determine this is to compare life insurance rates using QuoteWizard, which has a network of licensed professionals ready to help you find the best rates on your policy.

The cost also depends on the type of policy you purchase, and whether you purchase a group life insurance policy from your work, an individual term life policy, a universal life policy, or a whole life policy.

Types of Policies

Usually, if you purchase a term life policy you could either be paying a fixed annual premium for the duration of the policy’s existence. With whole life, insurance premiums are paid your entire life, and you can terminate your policy and receive its cash value.

If down the road you think you might want to convert your term life policy to a whole life or universal life policy, be sure to obtain a term life policy from a company that also offers whole and universal life policies.

Health

The premiums for your life insurance policy depend heavily on your health. If you are a smoker, or have a dangerous pre-existing medical condition, expect your premiums to be higher due to the increased risk you pose to your insurer.

As a general rule, the younger and healthier you are, the lower your life insurance premiums will be.

Group and Senior Citizen Life Insurance

Obtaining group life insurance through work will be much cheaper than buying an individual life policy, but you will probably need to purchase additional coverage, as the face value of group life insurance policies are generally low.

As for senior citizens who want to switch life insurance providers or want to make the switch from term life to whole life, there are a few things to consider. One is that you should consider whether you really need insurance or not, because the premiums for seniors will be quite high. It is important to speak with a broker or agent to seek the most competitive quotes because of the expensive nature of life insurance for seniors.

Discounts

As with any type of insurance, you want to get the best deal. Insurance providers offer discounts when selling life insurance policies. For example, if you quit smoking or improve your health, you might be able to seek a discount. Also, get a medical exam when you purchase a new policy or switch providers, because this will significantly reduce your premiums. Life insurance without a medical exam, while available, is usually much costlier.

You might also be able to get discounts if you are a teacher, are in the military, work for the government, or make the switch to a safer career. Many types of discounts and money savers are out there—you just have to know where to look. Of course, you can always ask your agent or broker about discounts as well.

Review Every Few Years

It is a good idea to review your policy and insurance carrier every few years. Changes in your life may require beneficiaries to be written in or out of your policy. Also, term life policies don’t last forever so when they are up, you may want to look around for other providers before renewing.

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