Is there really a such thing as a bad life insurance company? If so, who should I take out a plan with?

Question

Is there really a such thing as a bad life insurance company? If so, who should I take out a plan with?

Answer 1

Sure, different companies have different ratings by authorities in the field, such as A.M. Best. The best thing to do is contact an insurance broker. A broker works with several companies and can get you the best coverage at the best price. To find a broker in your area, log onto a website such as http://www.lifeinsurancewiz.com and fill out a form requesting a free quote. Good luck!

Answer 2

Yes.  There is such a thing as a bad life insurance company.  Companies that don't pay claims, that don't have the financial stability to back up their promises or who engage in the ever-present "shady business" willingly are the kinds of companies you will want to avoid.

However, I must unequivocably agree with the earlier-given answer in one regard: it matters who your agent is.

A good agent will not place you with a bad insurance company, because the agent should be more interested in serving your needs than in their commission-based paycheck, and will be able to take better care of you than the insurance company would do directly.

The state you are in will dictate your options, as different states have different rules, regulations and restrictions.  AM Best is a good source to check financial stability, but you need a good independant agent to talk to you about reputation.

If price is no issue, New York Life has a near-spotless reputation and a ridiculous amount of money in reserve: they're not going out of business for anything shy of legislation against them.  If price matters, and honestly it probably always should, consult an agent for best results.

Answer 3

Don't know if I would label them "bad" or not but some life insurance companies are better than others.  Check out their AMBest rating.  I would only work with companies in the A range.  

I won't recommend one company over another but some good ones are Lincoln Benefit Life, Old Mutual, Americo, Met Life, Mutual of Omaha, Life Investors, Assurity Life, Allstate Life, State Farm Life, Farmers Life, AIG, ING, just to name a few.  I know I've left out many good ones but those are off the top of my head.

As important as the company is, the agent is just as important in getting the right product for your situation.  Please DON'T try to purchase life insurance via the internet unless you have a thorough understanding of ALL types of life insurance and ALL of the options available.