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Life and Health Insurance
Sickness and death are not subjects people enjoy
bringing up at cocktail parties. However unpleasant the subject,
preparation is a must. Life and health insurance are two of the
major components of preparation. Therefore, it's imperative that you
select a good life and health insurance company.
The most important consideration in finding a good life and health
insurance company is its financial strength. When it comes time to
file a claim, you want to make sure that your life and health
insurance company has the financial wherewithal to handle your claim
expeditiously and diligently. Obviously, your first step in finding
such a company is to shop around and do research.
Check online for the life and health insurance company's financial
rating. There are five independent agencies that rate the financial
strength of insurance companies. These five are Weiss, Standard &
Poor's, Moody's, Fitch, and A.M. Best. Each of these five have its
own standards of rating life and health insurance companies. Because
of this, it would benefit you to check the ratings of more than one
independent agency to get a good overall picture.
Many life and health insurance companies who are rated by these
independent agencies are quick to point out any positive reviews and
ratings they receive. However, you should be cautious when reading
life and health insurance company propaganda. They will only include
positive reviews and exclude any negative ones. Also, it's important
to keep in mind that the ratings scales will vary among the
agencies. For example, an "AA" rating by one agency might not be as
high as an "A++" rating by another.
Another thing to check when choosing insurance companies is their
license. Not every company is licensed to do business in every
state. You should always purchase life and health insurance from a
company licensed to do business in your state. By doing so, you will
be entitled to protection by your state's insurance department
should you have a problem with the company.
Every state has a "guaranty fund" available in case of problems. A
guaranty fund protects customers of life and health insurance
companies should they become insolvent. When you do business with a
licensed insurance company and they are financially unable to pay
your claim, the guaranty fund provides a mechanism to have the
claims of policyholders paid. Not all companies are covered by a
guaranty fund, however. These companies include Health Maintenance
Service Organizations, such as Blue Cross. As well, Insurance
Exchange, Fraternal Benefit Society, and Health Maintenance
Organizations are excluded. While all states have this fund
established, some key points of the fund can vary by state. Check
with your state's insurance department for details.
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