By Steven H. Kobrin, LUTCF
November 9, 2004
Copyright © Steven H. Kobrin, LUTCF.
All rights reserved.
How do insurance company ratings help us? Rating insurance companies provides a standardized scale, allowing the consumer to match his personal level of financial conservatism with a rating. Insurance companies with that rating should fall within the consumer's comfort zone.
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Professor Joseph M. Belth (editor of The Insurance Forum) provides an extremely useful rule-of-thumb for differentiating among the rating categories of insurance companies. In the September 2004 issue of The Insurance Forum, he explains the following:
If you are extremely conservative, we think "high ratings for insurance companies" should be defined as follows:
If you are very conservative, we think "high ratings for insurance companies" should be defined as follows:
If you are conservative, we think "high ratings for insurance companies" should be defined as follows:
I like this approach because it recognizes that people have different comfort zones and—depending on your degree of conservatism—there is an approach that is right for you.
In my experience, the vast majority of my clients have been satisfied with the conservative definition of high ratings.
Finally, here are the A.M. Best ratings of popular insurance companies, as of September 2004:
Copyright © 2001-2008 by Steven H. Kobrin, LUTCF. All rights reserved. Steven H. Kobrin, LUTCF, is an independent life insurance broker and recognized expert in the field, serving as a preferred life insurance quote provider for many professional advisors and their clients, including attorneys, accountants, financial planners, and loan officers. Experienced at patiently helping people through the life insurance maze, Steve is glad to share his perspective with the public and he warmly welcomes all emails and phone calls from consumers and consumer advocates. Email: skobrin@stevenkobrin.com |