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There are many different life insurance companies that have high caliber reputations, strong AM Best ratings, comprehensive life insurance policies, and excellent customer service. So how do you choose the best life insurance company?

Compare some solid numbers. You will want to make a decision based on a company’s AM Best rating (used to measure an insurance company’s financial strength). Also, of course you will want to make the decision based on the life insurance quotes that they show you.

Take a few moments and use our cutting edge life insurance quote finder to compare top online life insurance quotes from multiple life insurance companies side by side by requesting free life insurance quotes now!

The Purpose Of The Life Insurance Company

The purpose of the life insurance company is to offer protection to the insured in exchange for a premium.

In the event of death, the life insurance company makes a payout called a death benefit to the beneficiary.    The death benefit is intended for funeral and burial expenses in addition to the debt and living expenses for the deceased’s beneficiaries.

The whole idea is designed so that those left behind can maintain the same lifestyle they are accustomed to, despite the loss of a loved one and income earner.  So in essence the life insurance company provides peace of mind.

The Major Life Insurance Companies 

There are approximately 5,000 insurance companies in America today.  In one year insurance companies generate approximately 1 trillion dollars.  The portion of that money generated by life insurance companies is unimaginable.  Marketing dollars, strategies, and predictions distinguishes the majors from the minors in the insurance industry.

A few of the major life insurance companies are:

  • MetLife
  • New York Life
  • Prudential Financial
  • AIG/American General
  • Banner Life
  • West Coast Life
  • Nationwide
  • MassMutual
  • Allianz
  • Liberty Mutual
  • John Hancock
  • Lincoln Financial Group 

If the 80/20 rule applies, 20% of the companies generate 80% of the business, and thus 80% of the premiums.  Smaller companies can offer more specific and detailed products and services to compete with the larger life insurance company.  With the availability of the Internet, the smaller company is compared alongside the larger company.  This opportunity gives the consumer a chance to purchase a life insurance policy commensurate with budget and necessity.

Life Insurance Company Regulation 

For an industry like the insurance industry, there are too many opportunities for unethical behavior and bad judgment.  Like any industry circulating the type of money the insurance company circulates, there has to be checks and balances.

Who regulates the life insurance company? Well each state has an Occupational Regulatory Board that works in conjunction with the State Corporation Commission.  This Occupational Regulatory Board makes sure education standards and fees are met.

The State Corporation Commission makes sure life insurance companies operate according the state code of law.  Any complaints concerning the insurance company may be registered with the SCC.

The Life Insurance Company’s Average Annual Payouts 

When the insured pays his/her insurance premium, it is added to a pool of premiums.  Whether the payout is in a lump sum or in the form of an annuity, it is paid from this pool.  When establishing a person’s premium the life insurance company looks at the amount of the death benefit plus the cost of administration over the years.

When the death benefit exceeds the amount the insured could possibly pay in their working lives, it makes for a risky policy.  After all, life insurance companies are in business to make a profit. People are living healthier lifestyles; hence, longer lives.

Longer lives mean more premiums which warrant the decrease in monthly premiums.  Has anyone ever wondered how these numbers are calculated?

The Role Of The Life Insurance Company Actuary 

Life insurance company actuaries apply the science and math of their profession to calculate the statistics used to determine mortality rates.  They use life expectancy tables or what is referred to as the mortality tables to determine what a person’s premium should be based on the pertinent factors provided by the policy holder.

Today life insurance actuaries lend their talent to advise the company on other matters such as:

  • Risk Management
  • Investments
  • Marketing 
  • Strategic Planning
  • Statistical Analysis

How The Life Insurance Company Handles Discrepancies

When it comes to discrepancies, the life insurance company has to dissect the claim to make sure everything is in compliance with the policy.  One of the first things the insurance company wants to see is the death certificate.  This verifies that the insured is indeed deceased.  Further investigation is necessary when the death benefit is hefty, especially shortly after the policy is established.  The life insurance company has its own staff of investigators to handle any discrepancies.

How To Find The Best Life Insurance Company 

When selecting a Life Insurance Company, make sure it serves your needs.  It is suggested that one should choose a company in the state where they reside in the event of problems.  Some quick points to remember when selecting a life insurance company:

  1. Premium (and other costs)
  2. State Guaranty ( in case the company folds)
  3. The Strength of the Company
  4. Customer Service
  5. Products and Services offered
  6. A. M. Best Rating 

Compare Life Insurance Companies Now! 

Whether you have individual life insurance or group life insurance, it is important to your family to make sure the company you select is the right life insurance company for you.

In the end the terms of the policy have to benefit you and your family.  To select the right company now, use the quote tool at the top of the page to compare quotes from top life insurance companies side by side.

Get started finding life insurance today!

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