Ratings methodology for life insurance company reviews

Policygenius offers editorially independent reviews of life insurance carriers. Look what we take into account to help you make the right choice.

Tim Torres

By

Tim Torres

Tim Torres

Reviews Expert

Tim Torres is a Reviews Editor at Policygenius. His work has appeared in Computer Shopper, Tom's Guide, and numerous other outlets over the years.

Updated November 8, 2021|3 min read

Policygenius content follows strict guidelines for editorial accuracy and integrity. Learn about our

editorial standards

and

how we make money.

Policygenius provides in-depth reviews on life insurance companies to help you find the right option.

For these reviews, we’ve decided to focus on each company’s recommended term life product and important aspects such as financial stability, policy features, and customer service.

But why only term life policies? Because they often have the best value and flexibility for people in need of life insurance. You'll find information on permanent life policies, like whole life and universal life, but we don’t factor them into the scoring.

For the scoring, we rate each carrier in five different categories on a scale of 1 (lowest) to 10 (highest). These individual category scores are averaged for a final overall rating out of 5 stars— 5 being the highest score a carrier can receive, 1 being the lowest.

If there aren’t enough factors within a category to score on, then that category is removed and the remaining categories are averaged for the final score.

Speaking of, those categories are:

Policy details

First, we look at the coverage features of each company’s premier term life policy. Do they offer multiple term lengths? Are the face amounts reasonable? Is temporary coverage available? The more flexibility there is for customers, the better we rate the life insurance carrier.

In other words, companies with a wide range of coverage options receive higher scores.

Here are some of factors we look at for our Policy Option score:

  • Term length availability - Simply, more term lengths means more flexibility for policyholders. A company with 10-, 15-, 20-, 25-, 30-year term lengths will have a higher score than a company with only 10-, 20-, and 30-year terms.

  • Temporary coverage options - Not all companies offer temporary coverage between when an application is submitted and when the policy starts. Companies that offer coverage during this time period receive a higher score.

  • Starting face amount - The lower the starting coverage amount, the higher the score.

  • Maximum face amount - Similarly, the higher the maximum coverage amount, the better the score.

  • Rate reconsideration - If you become healthier after you start a policy, you may want the option to lower your rates. Companies that offer to recalculate monthly rates after a year are awarded more points. And they gain even more if they pay for your medical exam or allow for more than one reconsideration during your policy’s lifetime.

Price

For reviews of our partner carriers, we base sample rates on a certain applicant profile: usually a male non-smoker in California, who qualifies for a Preferred class, applying for a 20-year, $500,000 term life insurance policy.

We then compare the average monthly premium costs for each eligible age group to the overall industry average, pulled from internal Policygenius data that's based on the costs of policies from our partner companies, including AIG, Banner, Brighthouse, Lincoln, and others.

Remember that your individual monthly costs will vary by your chosen company, coverage amount, health class, length of term, and state. And not all policies are available in all states. In general, however, the lower the monthly costs, the better the score for that company in our review.

Financial confidence

After Price, the next question we tackle is, "Will the company be able to pay out beneficiaries?"

To find that out, we look at how major financial rating institutions score insurance companies. Then we base our scores on their ratings.

Here are the agencies we look at for our Financial Confidence score:

These company ratings are normalized and scored out of 10. For example, Standard & Poor’s, or S&P, rates companies on a scale of AAA (the best possible rating) to D (the lowest rating). We assign numbers to those letter grades, and then average the ratings from each institution for the final score.

Third-party ratings

This is based on satisfaction scores from consumer sentiment institutions, third-party review sites, and complaints to state insurance boards.

The sources we look at for our customer score include:

  • Consumers Advocate rating - A third-party review site that evaluates companies and assigns a numerical score based on policy options, reputation, and other elements.

  • Consumer Affairs overall satisfaction rating - A third-party review site that allows verified customers to directly rate and write reviews of companies. The reviews and ratings are then averaged into a final numerical score.

  • National Association of Insurance Commissioners (NAIC) - Complaints submitted to state insurance boards for individual life insurance policies as measured by the National Complaint Index Report.

Customer experience

How convenient is it to start a policy with a company?

The factors we look at for our ease of application score include:

  • Average turnaround time for a policy to become active - The quicker the policy becomes active, the better the score.

  • Is there a no-medical exam option? - More life insurance carriers are offering customers policies that don’t require medical exams. That’s more and more important these days, and that means more points for those carriers.

  • Are there multiple online tools and resources to use? - If policyholders provide ample information and digital tools on their website, including policy details, online quote tools and applications, and online forms, they get a higher score.

  • Do they have comprehensive customer service? - Besides having a suite of do-it-yourself digital tools, can you get in touch with a human being when you need one? Carriers get more points if they 24/7 assistance, a live chat option, and both email and phone contacts.

  • Discount options - Not all companies offer ways to save money. If they do, they receive a higher score, and extra points if they allow the bundling of other policies.

Policygenius offers insurance policies from many of the nation's top insurers, who pay us a commission for our services. However, all editorial choices are made independently.

More about

Life Insurance

SBLI Life Insurance Review

SBLI offers accelerated underwriting, which allows qualified applicants to skip the medical exam and receive a policy decision in as little as a week.

Read more

What is A.M. Best?

A.M. Best is a credit rating agency that rates insurance companies’ ability to meet their financial commitments to customers.

Read more

What is the Better Business Bureau (BBB)?

The BBB rates life insurance companies based on customer satisfaction and trustworthiness, which informs Policygenius’ best company recommendations.

Read more