How to Rate Life Insurance

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It's important to realize that not all life insurance policies are created equal. Find out how to rate life insurance with help from a financial industry expert in this free video clip.

Part of the Video Series: Life Insurance Lessons
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Video Transcript

Hi, my name is Phil Cioppa and I'm the host of the nationally syndicated radio program The Phil Cioppa Show. The question has been asked, how do you rate a life insurance company? How is it that you know the person or the company with whom you're doing business is actually reputable? Well there's several ways to do that. The first is to go to a ratings company like Moody's. Moody's rates different carriers and they'll tell you exactly where they are on the scale. Are they triple A or are they in the D category. If they're not rated above A, you really don't want to be dealing with them. Why? Because they may not have the ability to pay, they may not have the capital behind them at the time of death in order to pay out the beneficiary. The other situation that occurs is you should be looking at the Better Business Bureau. The Better Business Bureau is an excellent resource to find out what kinds of complaints there are against a particular company. And if you find out that there's even been one complaint about a payout of a regular insurance policy, where there was no question about the death, you want to run as far away from that company as you possibly can. So when you're buying insurance or when you're looking for an insurance policy, look over the companies that your financial adviser is going to give to you. Most of us will only deal with triple A or better companies, so you really don't have to worry. But every now and again one of these smaller companies that are not well capitalized that maybe are not as strong as some others will slip into the mix. That's when you want to be careful. Make sure you know with whom you're doing business, and make sure it is a company that is reputable and can pay out when the time is needed. Thank you.

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