My life insurance company is rated A- and I am worried about that. Should I be?
Let's get to the source of the worry by taking a closer look at what ratings mean. They point to only two things: the claims paying history of a carrier and the financial stability of a carrier. There are several ratings organizations and they generate different looking ratings, which can be confusing. Here are several: Weiss, Moody's, Fitch, and A.M. Best. Imagine if I graded your performance and gave you an A, but the other grader gave you a B+. You might wonder which is closer to being right...
While A. M. Best gives your carrier a rating of A-, you should know that that grade is equal to this statement from the rating service: "Excellent: assigned to companies that have, in our opinion, an excellent ability to meet their ongoing insurance obligations." If you were to read that statement having not seen the letter grade, you would think - and be satisfied with the fact that you are with an excellent carrier, wouldn't you? It's that minus sign that has you worried, right?
Personally, I would not worry about the A- grade. We know that it is equal to excellent. And, then there is the fact that often, life insurance companies buy other life insurance companies. When an A+ company buys a B+ company, the purchasing company's rating may slip for awhile, but it returns after some time has passed. See how the rating is not so static? Stay in the A range of carriers and you will likely be ok. Of course, if it worries you enough anyway, it may be time to change carriers. Hope that helps.
| 12.15.15 @ 17:34
Kirby's response to both your question and concern was "right on the money!" I will add that now fortified with Kirby's primer about carrier ratings, have your agent or representative explain the down grade. Hopefully the response will satisfy your concerns.
All the best,
Darius | 12.16.15 @ 06:10