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How to Choose a Safe Insurance Company

If you’re buying an insurance product, you’re betting that the company will be around to pay benefits. There are two things you should do before giving your money to any insurance company for any product (life, disability, auto, home, annuity, long term care insurance).

First, visit your state department of insurance website and make sure the company is registered in your state and what else you can find out about the company. Every insurance company must register to sell products in a state. If the insurance company sells products that promise future payments, the company also pays into the state guarantee association. This is basically an insurance pool that will pay a portion of promised benefits if an insurance company goes broke.

Second, check out the insurance company’s rating at weisswatchdog.com. Weiss is more impartial than the other rating agencies. You have to sign-up on the website to get ratings, but it’s free.

The info you can find on this site is useful. For example, a client was considering a life insurance policy offered by Sun Life life and Health Insurance Company.  Sun Life gets a C- rating by Weiss. The client was concerned enough about this rating that he went with a policy offered by another insurance company, even though the policy premium is about $20/month more.