Danger Zones

Carrier Ratings

During the month of May, we are taking time to explore potential danger zones when considering existing life insurance policies.  Policy performance is an obvious factor when monitoring an insurance portfolio, but the insurance carrier’s performance can be just as critical and can be overlooked as a consideration.

Carrier ratings are based on an insurance company’s ability to pay out the death benefit and meet other financial obligations.  There are five rating agencies that assess the financial stability of the insurance carriers on an annual basis with AM Best being the largest and most referenced.  Quality insurance professionals use the carriers’ ratings when determining which insurance company should be used for a client’s policy. 

A Comdex ranking is also used to assess a carrier’s financial stability.  The Comdex score combines all five of an insurance company’s ratings into a single numerical score making it easier to compare each carrier’s financial strength.  The closer the ranking is to 100, the more financially stable the carrier is acknowledged to be.

Our partnership with M Financial Group grants us unique access to a quintet of highly rated insurance carriers through proprietary product selection, direct access to underwriters, and dedicated service teams.  We are also contracted to sell through several carriers who are not part of the M Financial Group relationship that range in their carrier rating and are given individual consideration when they are a potential fit for a client.

Once a policy has been implemented, the carrier’s rating can change.  When a carrier’s rating has fallen, it reflects a financial struggle and can potentially indicate looming bankruptcy or the sale/merger of an insurance company.  When the carriers merge, policies are transferred and generally remain inforce but can be negatively affected by the treatment at the accepting insurance company, so the carrier’s rating is an important consideration to weigh as the policy is reviewed on a regular basis.

Contact us with any questions or opportunities to help you or your clients achieve their goals.  This is what we enjoy doing for only a select number of families, businesses, and charitable institutions each year, and we look forward to hearing from you.