Do Life Insurance Comapny Ratings Really Matter?

Truth be told, a life insurance policy is a set of promises by the parties involved, which in this case, you are who is the policy holder and the insurance company. The company makes the promise to pay the claims when required and you promise to be paying premiums. Just like with any other promise, the credibility of the one giving the promise has to be carefully weighed. In the case of the company, you can just look up its rating and you will get a glimpse of their ability to live up to their promise.

The higher the rating the better for you, as it proves the company has the ability to execute its financial obligations without much difficulty as and when required. Though it is always good to be on the sure side, it does not always mean that a low rated company will default on their part of the contract. Sometimes due to a financial recess, a low rated (and sometimes even the highly rated ones) will find it difficult to keep their end of the bargain.

But insurance regulators always come to their rescue to ensure market stability, so the chances of losing for as a policy holder are very slim.