Next Steps

Choosing a Life Insurance Company

From financial stability to company history, choosing a life insurance company from which to buy insurance is just as important as choosing what type of insurance to purchase.

How to Choose Life Insurance

Many people choose their life insurance company based on the competitiveness of their life insurance quotes. While price is important, there are many other factors to consider when making this important decision.

Financial solidity

No matter how good a company’s products or rates, you should seek a company that is financially secure enough to pay your claim(s) when you need it to. Unlike the protection provided to banks by the Federal Deposit Insurance Corporation (FDIC), there is no such guarantee for life insurance policyholders. For this reason it is important to select a company that’s likely to be financially sound for many years. A good place to start is looking at ratings from independent rating agencies.

Product

Most companies offer a broad range of policies, coverages, enhancements, and payment options. Select a company that offers the life insurance product(s) and features that best meet your needs.

Advice and customer service

For many Americans, the subject of life insurance is complicated. For this reason, it can be very helpful to have access to a company representative with whom you can communicate effectively and who truly wants to answer your questions and address your concerns. Be sure there is a real live agent or a customer service representative number you can call when you need assistance.

Market ethics

The track record of a life insurance company is its report card. Check with your state insurance department to see if the insurance company you are considering doing business with has had significant consumer complaints.

Premium life insurance and cost

Premiums can vary widely among insurance companies, either because they have features that others don’t or because they simply charge more than others for the same coverage. Your first step in comparing policies is to make sure you compare similar insurance plans based on criteria that include your age, policy type, policy features, and how much life insurance you are looking at buying.

A rich company history

How established is the life insurance company you’re considering? If a company has been around for decades, that alone speaks volumes about its financial stability and legacy of commitment to serving its policyholders.

The bottom line

Buying life insurance can be one of the most important financial decisions you’ll make, and it can also be one of the most complicated. Selecting the right policy begins with finding the “right company,” one that can provide you with appropriate recommendations based on your needs, has a variety of products and prices, has a reputation for outstanding customer service, and has the financial capacity to pay out claims when they come due.


Was this article helpful?
27
6

This article is a high-level summary of things to consider when purchasing life insurance. The information presented is for information and educational purposes and meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective or its subsidiaries.

Neither Protective life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax-related decisions. For information about Protective life and its products and services, visit www.protective.com.

Choosing Life Insurance

While price is important, there any many factors to consider when choosing a life insurance company. This article explores how to evaluate a life insurance company through financial solidity, product, advice and customer service, market ethics, premium life insurance and cost, company history and the bottom line. For more information, visit our learning center.

WEB.1252.12.14