How We Evaluate and Score Life Insurance Providers
45 firms that provide life insurance plans were thoroughly investigated for Investopedia’s list of the top life insurance providers. We looked at each company’s policy offers, digital application and policy administration tools, customer complaint history, financial stability, and much more. This guide describes how we came up with these classifications and standards, how we scored each business, and how we finally selected the top life insurance providers.
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How We Investigate Life Insurance Providers
We developed a quantitative methodology that assigns ratings to each organization based on 70 criteria and six main categories by combining subject area knowledge, data from consumer and corporate surveys, and industry research.
We polled 500 individuals who had purchased whole, term, or universal life insurance within the previous 24 months in March 2024. Our criteria, weighting, and scoring system for our 2024 top life insurance companies rubric were informed by the outcomes. Based on the survey findings, we modified the weights for online tools, application procedures, and policy kinds and features. We discovered that the opportunity to purchase the precise coverage level they choose, together with financial stability and affordability, are the most important factors for life insurance purchasers.
We found that 45 life insurance providers satisfied our minimal requirements for online openness, consumer happiness, and financial stability. For every organization, we collected 70 rating criteria, yielding 3,150 data points. Data was gathered from corporate websites, media representatives, rating organizations (AM Best, NAIC, and J.D. Power), and customer service calls between May 20 and July 3, 2024.
Data Gathering and Evaluation
A 0.00–1.00 scale is used to rate the data values.
[0,1] is the binary criteria.
Scaled criterion = [0.00, 0.25, 0.50, 0.75, 1.00] (e.g., 5-point)
Constant standards: The lowest value in the database was rescaled to a score of 0.00, and the highest value was rescaled to 1.00, if greater values (such as the maximum death benefit) imply better outcomes. The maximum value was given a score of 0.00, and the lowest a score of 1.00, if lower values signify better outcomes (premiums, for example). Scores were assigned to all other values based on how far they were from the extremes.
Stability of Finances
Customers must have faith that the life insurance provider they select will be dependable enough to last for the duration of their policy, which may be decades. Additionally, businesses need to be able to afford to pay claims, which for a single policyholder may total millions of dollars.
The findings of our poll indicated that one of the most important factors for insurance buyers was financial stability. To make sure we only suggest businesses that can pay their claims for years to come, we only took into account the 45 that performed the best in a crucial financial stability metric.
We took into account each company’s AM Best rating in order to evaluate its financial soundness. The first credit rating agency in the world, AM Best, was established in 1899. It is now the biggest credit rating company in the world with a focus on the insurance sector. It carries out impartial evaluations of over 16,000 insurance firms’ creditworthiness, determining their capacity to settle debts, claims, and other financial commitments.
Year of Establishment
We gathered information on the founding dates of each insurance firm for journalistic purposes. We believed that this data offered some insight into the financial soundness of each organization, even though we did not grade it.
Availability by State
We also examined the states in which each life insurance provider holds a license to provide policies. We only took into account businesses that at least operate in the continental United States; we did not grade this data.