2022 AFBA Financial Planning Guide

quote systems however, that many of these services also sell life insurance, so their quotes may be biased and they may recommend more coverage than you need. Use the guidelines discussed in this chapter to determine how much insurance you need before going to these sites or calling. Also, when requesting a quote, do not ask for the best rate charged by an insurer because few people qualify for this rate — rather, ask for the rate that the insurer charges most of its policyholders. Before purchasing insurance you should compare several quotes and evaluate the financial strength of each insurer.

ratings of a given insurance company with two or three different rating services. The table below provides a brief overview of the major rating services. Another important consideration in selecting a life insurance company is the cost. As with any long term purchase, it pays to do your homework. The cost of life insurance is influenced by a number of factors including gender (females tend to live longer than males), lifestyle (i.e., drinking and smoking habits), health history, and age. Anticipated life expectancy or “mortality tables” are a key component in determining premium charges. Chapter 14 contains a life expectancy table which provides a reasonable approximation of current life expectancies. You can get insurance quotes from many different sources: direct from the life insurance company, agents, or online quote services. Keep in mind when using

INSURANCE RATING SERVICES

HIGHEST RATING

COMPANY

CONTACT INFO

CRITERION

1-908-439-2200 www.ambest.com

Superior ability to meet policyholder and other contractual obligations.

A.M. Best

A++

1-800-893-4824 www.fitchratings.com

Financial security and ability to meet claim obligations.

Fitch Investors Services, Inc

AAA

1-212-553-1653 www.moodys.com

Moody’s

Aaa

Best quality and smallest degree of credit risk.

1-877-772-5436 www.spglobal.com/ratings

Superior financial security and exceptional capacity to meet contractual obligations.

S&P Global

AAA

NOTE: All services have several rating levels — in some cases as many as 19 different rating categories. Consumers can feel relatively safe if they stick with companies that are consistently rated within the top three rating service categories.

CHAPTER 13: LIFE INSURANCE

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