Generally, life insurance companies underwrite and issue all types of policies including term, whole and universal life insurance. Though the best life insurance companies are very similar, there are certain factors that applicants should be aware of when seeking a carrier.
For instance, there may be little difference in the daily operations of insurance companies or the different term life policies offered, but there are two types of corporate structures for insurance companies that may affect the way in which they are managed.
We highly recommend you research the top life insurance companies to find customer reviews and ratings because life insurance is a long term financial commitment, and it is essential that you find the best, affordable coverage.
Stock or Public Companies
Many life insurance companies are publicly-owned companies that are traded on stock exchanges. This means that many individuals called shareholders own a piece of the company and share in any profits the company makes.
Management of public insurance companies must answer to stockholders who receive company profits in the form of dividends. Policyholders are simply customers who buy the company’s product.
In mutual insurance companies, the policyholders each own part of the company. Buying a policy from a mutual term life insurance company is a little like buying stock in a publicly held corporation. Profits are split among policyholders in the form of dividends or reduced premiums when the company makes a profit.
Only those with certain types of policies, called participating life policies, receive dividend earnings, but all policyholders are eligible for cheaper rates when enough profit is generated. This means that policyholders have the option of receiving a dividend, or using the dividend to pay your monthly premium.
Best Term Life Insurance Company
Most policyholders are not able to tell the difference between public and mutual companies when they purchase coverage or make a claim. Since stock companies are in a position to raise more funds for expansion, some experts feel these life insurance companies are more financially stable, with higher ratings.
However, some of the oldest and largest insurance carriers in the country are mutual companies, like Northwestern Mutual, Mass Mutual, Penn Mutual, and Mutual of Omaha.
When choosing a term life provider, whether to choose a mutual or publicly-held company is really a matter of personal preference and will not really make a different in how your term life policy is administered or your claim is processed. The cheapest term life insurance for you can be offered from either a public or mutual company.
Check A Company’s Reputation, Reviews, and Ratings
Many term periods for life insurance policies are long term commitments, such as 20 or 30 years, so it is important for consumers to make sure the company they buy a policy from will be able to honor their commitment over many years.
We’ve comprised a list of the best life insurance companies from rating agencies like AM Best and JD Powers, who offer rankings for major insurers and rate their financial stability and customer reviews.
When buying life insurance from a particular company, individuals can request the company’s financial prospectus to get additional rating and financial information. State insurance departments are also a good source of information, especially for a small company who might not have a big name reputation.
Customer Service Reviews and Ratings
While most consumers have limited contact with their term life carrier, it is wise to check customer service ratings on consumer review websites after you get a quote and want to further research a particular provider
If a family member dies, policyholders want to know that the company will treat survivors with respect and pay their claim promptly to alleviate the financial strains an unexpected death can cause. If there are ever any disputes about payments, the policyholder will want to know he can speak with a company representative to resolve the issue.
Consumers should do some research when choosing a term life insurance company to assure themselves they are buying the best, cheap term life insurance from a carrier that will be there for their survivors should they die prematurely. There are many excellent choices, and by entering your zip code to compare quotes, coverage and companies, we can help you choose one of the best companies in the U.S.