How to Compare Term Life Insurance Companies

When you are purchasing term life insurance for yourself or a family member, you are creating a contract between you and the insurance company. When you hire a contractor, wouldn’t you check out the company before you hire them? Getting to know the insurance company that you are going to trust with your family’s future is far more important. There are some basic things that you need to look at before you sign on the bottom line.

Currently in the United States, there are over 1,500 insurance companies operating that sell life insurance policies to clients. Most of these companies are simply subsidiaries of their parent companies. These subsidiary companies are commonly created because each state has different laws, and this allows the companies to be able to tailor their policies to be able to meet that state’s rules and regulations. The parent company and the subsidiaries are separate companies, but they all operate under the same corporate umbrella. Using a single centralized company would not work due to all the disparate laws and jurisdictions. A very important consideration is whether the insurance company has an entity in your local state. Otherwise, in the case of a dispute, you will not be able to bring the case before your state insurance regulatory agency.

Once you find a company that has an operation in your state, there are some important considerations that you should look at, including the following: the policy, the company, financial stability, and claims settlement.

Obviously, you want to verify the policy. Typically, this is the step where most people stop, but this is only one part of what you should check. Make sure that the policy meets your needs. Read the whole policy, including the fine print. Make sure that the policy has all of the features and services that your agent promised. After you sign the policy, it is too late.

When selecting the insurance company, never rely solely on the company name. The name that they select has a lot to do with marketing, and the name that they choose is intended to project financial strength, fairness, dependability, etc. Words that are commonly used in the name include reserve, security, assurance, and equity. Don’t trust these words without examining the company’s history and credentials. It is also a good idea to go with trusted companies that have been in the business for many years. They have been around long enough to have a trusted name in the business.

Because you are buying this policy for many years, you want to make sure that the company will be there when you need them most. It is important to take a look at the financial strength of the company. In order for the company to survive, you need to make sure that they have a strong financial foundation so they can survive down times in the market. You can check their financial ratings from several independent agencies. You want to select a company with the highest rating possible.

Also take a look at the company’s record for paying claims. You can get this information from the national claims database or from your state’s insurance regulatory agency.

These are just some of the things that you should check on before you sign up for any policy. Make sure you are comfortable with it before you purchase the policy. There are many companies that can offer you quotes on term life insurance.

Lost Life Insurance Company Found

Your brother just passed away and you have a life insurance policy in your hands. It is giving you some comfort that he did tell you about it just before he passed away; however, the phone numbers on the policy are wrong, the address is no longer available and the company is no longer in business. You are now lost. Where do you go? Who do you call? What are your options?

According to law an insurance company cannot just close its doors and walk away. It must be taken over by another insurance company or by the government. Once in the hands of the government they determine the situation of the company and reassign it to another life insurance company.

The only problem with that is when company “A” takes over company “B’ they can be very picky. They do not have to take all policies and assets of a company can be distributed to not only one company but several. Also, the companies only take over active policies. For example, if you had a term policy with company ‘B’ and the insured person passed away during that term the beneficiaries would be eligible for the death benefit. However; if it was, for example, a 10 year term policy and it ran its course before company “A” bought out company “B”, company “A” has no obligation to take it over. So it would be lost.

It is so important to first of all, keep all your life insurance information on a central database so it can be claimed quickly. With all the mergers and takeovers these days you will be glad your beneficiaries will have a central database to search.

It is also good to know how to find out what company took over the old company. There are services that do this for you. Now it is very important to know, no one can guarantee the new company has possession of your life insurance policy, but they should guarantee the company name they give you has taken over the old one you are looking for.

Prevent lost life insurance and guarantee your beneficiaries will find it when the time comes. Claim it quickly so you will not be part of the merger/ takeover shuffle.