Avoid A Rip-Off! How to Choose A Life Insurance Company
Contrary to what we have been taught, price isn’t always the best answer. When it comes to life insurance the company that offers the best rate isn’t necessarily the one you should choose. The price landscape for life insurance is fairly level, with maybe only a 1-5% variation in rates by company for similar amounts of coverage. The big factor is to determine how quickly your family will receive the benefit amount if they had to file a claim if you die. If there is a delay in issuing the payment, then what seemed like a low rate at the time suddenly looks kind of pricey considering your family doesn’t have any money. Here are some tips that can help you choose a company that is right for you, and your family.
If you are actively looking for coverage you probably have collected quotes from multiple insurance companies. Once you have narrowed the field down 3 different insurance companies, search online and you will find information on just about all of them. In fact finding out information for insurance carriers is easier than for companies in other industries since it is an industry governed by your states Insurance Commission. One of their duties is to monitor the insurance industry for anything that may indicate fraud or abuse of trust between the insurers and their customers. To that end each state maintains a database of insurance complaints which are public information and found easily online. Do a quick search to see if any of the companies you are considering doing business with have an excessive amount of claims, or more specifically, if there are complaints about failing to pay claims in a timely manner.
Of course you have to be understanding that these companies literally serve millions of customers and all of them have had a complaint filed with the state insurance commission at one time or another. To put it in perspective, a company that has issued 10 million policies may have a thousand complaints logged. But that means that less than 1% of their customers have had a problem. What you are looking for is a pattern of a large number of complaints regarding one particular area.
Ideally the company you choose will only have a small number complaints on file and, for the most part, if you have shopped online with a reputable agency you will only be considering companies that have an “A” rating or better from one of a number of industry groups such as S&P or AM Best.