How to pick a life insurance company

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How to pick a life insurance company

Buying a life insurance policy isn’t the same as buying a TV or a kitchen table or some other consumer good. Buying a life insurance policy is like buying a promise. Depending on how long you want to keep your policy, this promise can last for decades.

Naturally, you want to make sure that the company behind your policy has the ability to keep that promise. That means choosing a life insurance company that will still be around in ten, twenty, or thirty years. And it means choosing a company that won’t give your survivors a hard time when they try to make a claim. All in all, it means choosing a company that you can trust with your life insurance.

Okay, that all sounds great, you might think. But HOW do I judge whether or not a life insurance company will give me or my survivors a good experience?

We know this is a problem without an easy answer. Customer reviews aren’t enough – there’s very little reason to write a positive review of a life insurance company, especially since the people who benefit the most are the survivors of a recently deceased person. (For whatever reason, "Review life insurance company" isn’t high on most funeral prep lists.) There are third-party agencies that do reviews, too, but they mainly focus on the company’s finances (which is important, but not always the most important).

Here’s a list of the things that we think are important when it comes to choosing a life insurance. They come from our own experience shopping for life insurance, as well as years of experience talking to customers. And since we want to make picking a life insurance company easier (and all online, at your own pace), we built this information into our own insurance company reviews. You don’t have to use our reviews, of course, and our reviews don’t cover every insurance company out there, but you can use this information to do your own research and make an informed decision on your own.

The important details

Basic company info

When was this company founded? How many policyholders does it have? What ratings does it get from financial reviewers?

If you, like most people, have a relatively simple application (meaning no major health problems), these will probably be some of the most important details to you. You just want to make sure that the company you’re choosing is legit, and won’t suddenly go out of business in five years.

While information like founding date and current number of policyholders can help you feel a bit more comfortable, it’s the financial reviews that can help you answer that super important question. There are multiple companies that perform these kind of reviews, and you can read more about how they grade insurance companies in this article.

Application process

Life insurance applications take a long time – trust us, we know – and a lot of that is just because it’s a very hands-on process with a lot of steps featuring a lot of different parties. But some of it is the life insurers. Frankly, some of them just take a lot longer than others! We put this into our reviews so you’d know what to expect.

Customer service

You can get just about anything online these days, including a tank. But did you know there are some life insurance companies that won’t let you change your address online? Or change your payment information online? And make you fill out paper forms to update your beneficiaries?

One of the whole reasons we started PolicyGenius is to make buying life insurance online easier, so we think it can be kind of lame to then hand a customer off to a company that doesn’t let them do basic tasks online. While you will hopefully not have to interact with your insurance company that often, we don’t want it to be an arduous experience every time you do.

Policy details

If you’re just starting on the life insurance shopping ~ experience ~, our explanation of a company’s policy details can be extremely helpful for deciding what, exactly, you’re looking for in a life insurance policy and, by extension, a life insurance company. If there’s a specific feature in the policy you’re interested in, you can probably find an article here on our blog about it, or you can chat with one our agents to learn more.

If you have health problems, it becomes a whole new ballgame

If you’re having health problems, I feel bad for you son. I got 99 problems but underwriting ain’t one. HIT ME!

Of course, a lot of the details we lay out in our reviews become moot if you have major health problems like diabetes, or a family history of a disease, or even if you’re a scuba diver.

That’s because every life insurance company has their own standards for how they assess risk, which means they all view your health a little differently. (This is the same for extreme sports like scuba diving or skydiving or rock diving.)

It’s hard for consumers to know this – it’s not exactly something that life insurance companies advertise. It can also be hard to know exactly which company is best for you until after you’ve had the medical exam, which sometimes either reveals new information about your health you didn’t know or updates previously known health information.

Ultimately, underwriting isn’t really something you can prepare for at the beginning of the life insurance shopping stage (unless you recently got a physical, or you already know you have some medical problems, in which case you can talk to an agent about the best way to move forward). Instead of being proactive, you have to be reactive.

You’re not alone, though – your independent life insurance agent can help you compare policies and underwriting tables from a wide variety of life insurance companies in order to find the right one for you. In some ways, it’s more important to pick a life insurance agent you trust than it is to do a lot of research into specific companies. Your agent should be an expert in the field, and be able to answer all of your questions, no matter how weird and specific.

Image: Robert McGoldrick