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The Short Answer

How Safe Is Your Life Insurance Policy?

The insurance company's financial rating and your state's guaranty limits are among considerations to make when buying.

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Question: I've been shopping around for life insurance and want to make sure I buy a policy from a company that will be able to pay if and when the time comes. How do I use a company's financial strength rating to gauge this, and how is it determined?

Answer: The financial health of your life insurance provider is important to consider, but first come bigger questions, such as do you need life insurance, how big a policy do you need, and what type makes the most sense in your case--term, whole, universal, or variable? Once you've answered these questions, it's time to find a policy and a company that fits your profile. This may be done via the many insurance marketing websites or through an agent. In either case, at some point you're likely to be presented with a list of companies and financial strength ratings for each.

Adam Zoll does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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