Life insurance ratings methodology

Here’s how we calculate Policygenius ratings to compare life insurance companies in our reviews.

adam-morgan

By

Adam Morgan

Adam Morgan

Editorial Director

Adam Morgan is an editorial director at Policygenius who leads the life insurance team. Previously, he led editorial teams matrixed across multiple financial publications at Red Ventures — including Bankrate, NextAdvisor, Million Mile Secrets, and others.

Updated|3 min read

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We designed our life insurance reviews to help you compare the highest-rated companies without spending hours of your own time doing research.

Our ratings methodology combines four subfactors — price, customer experience, transparency, and financial strength — into a single Policygenius rating on a scale from 1 to 5, rounded to the nearest tenth of a decimal.

To ensure we’re comparing apples to apples, we convert these four subfactor ratings into t-scores and z-scores before combining them into a weighted composite rating.

Here are the four subfactors we use to calculate our overall Policygenius ratings for life insurance reviews.

Price rating

We categorize each life insurance company on a 1-to-5 price rating scale, based on our industry-leading rate data published every month in the Policygenius Life Insurance Price Index. Specifically, we use the average monthly premium cost for 35-year-old female non-smokers with a Preferred health classification and a 20-year term life insurance policy. 

The price rating accounts for 35% of the company’s overall rating — unless we don’t have rate data for the company, in which case we leave their price rating blank, and don’t factor it into the company’s overall rating.

Price rating

Average monthly premium

1

More than $125

2

$100-$124

3

$75-$99

4

$60-$74

5

Less than $60

Customer experience rating

There are many third-party customer satisfaction ratings for life insurance companies, including J.D. Power surveys and Trustpilot reviews. But our customer experience rating at Policygenius is based on a single, firsthand source of truth: the NAIC’s (National Association of Insurance Commissioners) National Complaint Index Report

This searchable database assigns each insurance company an index score by dividing its share of complaints by its share of premiums in the U.S. market. The industry average score is 1.00, meaning a company with a score of 2.00 gets twice as many customer complaints as one would expect for a company of its size of the company.

Our customer experience rating accounts for 20% of the company’s overall rating — unless the NAIC doesn’t provide an index score for the company, in which case we leave their customer experience rating blank, and don’t factor it into the company’s overall rating.

Transparency rating

With so many terms, products, and companies to choose from, life insurance can be confusing. At Policygenius, we value companies who are transparent about their offerings, rates, financial strength, and ways to get in touch for help.

Our transparency rating accounts for 20% of the company’s overall rating, and awards points for each of the following details available on the company’s website.

Transparency factors

Points

Phone support

1 point

Email support

1 point

Online support center

1 point

Live chat or chatbot support

2 points

Term length options

1 point

Minimum and maximum coverage amounts

1 point

Financial strength ratings 

2 points

Average rates (before quote estimate)

2 points

Financial strength rating

For this subfactor, we average scores from the “Big Three” credit-rating agencies: A.M. Best, S&P Global Ratings, and Moody’s Investor Services. Each of these ratings is designed to predict whether a company has the financial stability to withstand a major economic downturn like the financial crisis of 2008; highly rated companies are expected to survive even historically bad economic conditions, while low-scoring companies may not.

Our financial strength rating accounts for 25% of the company’s overall rating. If the company hasn’t been rated by one or more of the Big Three credit-rating agencies, we omit the missing rating and average the remaining ratings.

Points

A.M. Best

S&P Global Ratings

Moody’s

10

A++

AAA

Aaa

9

A+

AA+

Aa1

8

A

AA

Aa2

7

A-

AA-

Aa3

6

B++

A+

A1

5

B+

A

A2

4

B

A-

A3

3

B-

BBB+

Baa1

2

C++, C+

BBB

Baa2

1

C, C-

BBB-

Baa3

Overall Policygenius rating

Finally, after converting each subfactor rating into t-scores and z-scores, we combine all four into a single, weighted composite Policygenius rating between 1 and 5 — rounded to the nearest tenth of a decimal.

Price

Customer experience

Transparency

Financial strength

Policygenius rating

35%

20%

20%

25%

1 - 5 stars

Author

Editorial Director

Adam Morgan

Editorial Director

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Adam Morgan is an editorial director at Policygenius who leads the life insurance team. Previously, he led editorial teams matrixed across multiple financial publications at Red Ventures — including Bankrate, NextAdvisor, Million Mile Secrets, and others.

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