Whether you’re shopping for life insurance for the first time or looking to switch companies, understanding a company’s financial stability and security should be at the top of your list when it comes to assessing different life insurance providers. After all, nobody wants to purchase a policy only to find out that the insurer is in poor standing and can’t pay out benefits if something were to happen. With this in mind, it’s important that you know key indicators of how financially secure an insurer actually is before making any decisions. In this blog post, William Schantz runs through some of the most important factors to consider when researching life insurance companies and learning more about their financials.
William Schantz On How To Assess A Life Insurance Company’s Financial Stability
It is extremely important for anyone considering buying life insurance to ensure that the company they are planning on dealing with is financially stable. When assessing the financial stability of a life insurance company, it is important, as per William Schantz, to look at several different factors. These include:
1) Ratings from independent rating agencies such as A.M. Best and Standard & Poor’s:
The ratings from these agencies indicate the level of financial security that they believe a life insurance company possesses. They typically assign ratings on a scale of AAA (highest) to D (lowest). It is important to pay attention to any changes in the ratings and understand what may have led to them so you can assess the long-term stability of the insurer.
2) Financial statements:
It is also essential to review the past financial statements of an insurer in order to better understand their financial health. Look for measures such as the company’s profitability, liquidity, and solvency ratios to get a sense of its ability to meet long-term obligations.
3) Investment portfolio:
The investment portfolio of an insurer is another important indicator of financial stability. The quality and diversity of the investments held by an insurer should be assessed in order to gain a better understanding of the strength of their balance sheet and ensure that they have sufficient funds on hand to pay out claims if necessary.
4) Regulatory compliance:
Finally, it is important to make sure that the life insurance company you are considering is compliant with all applicable regulations before making any purchase decisions. According to William Schantz, this includes ensuring that their policies comply with state regulations and that their financial statements have been audited according to Generally Accepted Accounting Practices.
William Schantz’s Concluding Thoughts
Taking the time to thoroughly evaluate a life insurance company’s financial stability is essential, says William Schantz, in order to make sure you are making an informed decision when selecting an insurer. By considering ratings from independent agencies, reviewing past financial statements, assessing investment portfolios, and ensuring regulatory compliance, you can better understand the strength of any potential insurer and make sure your finances are in good hands.