Frequently Asked Questions

Why buy life insurance?

4 Good Reasons to Have Life Insurance
Think you don’t need life insurance if you don’t have kids? Think again. It may seem like an unnecessary expense. But there are many reasons to have life insurance, even if you’re not supporting a family.
1. Mortgage protection
Whether you live by yourself, with a spouse or significant other, you may want to buy life insurance as mortgage protection. Think about it − you don’t want the person you live with to be homeless if you die unexpectedly, do you?

Term life insurance can be used to pay off an outstanding mortgage balance. Just select a term that matches the length of your mortgage payment period. Some companies even offer decreasing term insurance, which means the death benefit decreases along with your mortgage balance.

2. Income replacement
You and your significant other may have planned for a future based on two incomes − but what if one of you passes away unexpectedly? Life insurance can be used to replace the lost income so the survivor can maintain the same standard of living.

3. Final expenses
You’ve seen the commercials − funeral expenses, burial costs and medical bills can add up to a hefty amount. The last thing you want is for your loved ones to shoulder this extra burden.

Life insurance can be used to plan for these final expenses. Permanent life insurance is available in various amounts, so you can pick a death benefit that meets your needs.

4. College funding
 OK, OK … this one only applies if you have kids. But have you seen the tuition rates lately?
Life insurance can help fund a college education. If you die, the death benefit may be invested and potentially grow to the needed amount by the time your children reach college age. Feel better knowing that you helped prepare for their future − even if you are not there to see it.

Just keep in mind that investing involves market risk, including risk of loss of principal. Take care to ensure that permanent life insurance is suitable for your long-term life insurance needs. You should weigh any associated costs before making a purchase. 

The earlier the better
So maybe you’re starting to see the need for life insurance … and you’ll call your agent next week, right? Don’t put it off! Typically, the younger you are when you get insurance, the lower the cost and the easier to get approved.

Why Should You Buy Long-Term Care Insurance?

It will help you keep your independence and dignity. Here's how. . . some of you will spend all your assets on care while others plan to give their money away or put it in trust. With no assets you will now qualify for a welfare program called Medicaid. Medicaid typically pays for a semiprivate room in a nursing home, and; not all nursing homes take Medicaid patients. In many states it's not easy to get Medicaid to cover home care or pay for assisted living. Many people want to stay at home, but with Medicaid may not be able to. And assisted living is rapidly becoming a preferred alternative to nursing home care for certain disabilities but Medicaid may insist on a nursing home instead.

A nursing home is not the most desirable place to finish out one's life. For many, a terminal stay in a nursing facility robs them of a purpose in life and strips away their dignity. As an example, have you ever thought of the indignity of being bathed, toiletted or diapered in a nursing home environment? No wonder many people express the desire to die before ever having to go into a nursing home.

Why buy disability insurance?

Disability Statistics
Disability insurance is an extremely important coverage to own. Having good medical insurance allows you to avoid bankruptcy if you have a large medical claim. However, paying the medical bills may not be enough! If your accident or illness leaves you disabled, your income will probably stop. Yet, you still must pay for food, utilities, the mortgage and other living expenses. Maybe your income is also necessary to help raise children. Unless you are wealthy enough that you do not need to work, disability insurance is essential! Here are a few important statistics on disability:

  • Between ages 35 and 65, seven out of ten people will become disabled for three months or longer.*
  • 1 out of 7 employees will be disabled for 5 years or more before retirement.*
  • At the age of 32, a disability of three months or longer is six times more likely than death.*
  • In recent years, 7 out of 10 claims for Social Security disability benefits were initially refused.**

Why is AM BEST insurance rating important to me?

A Best's Rating is an independent third-party evaluation that subjects all insurers to the same rigorous criteria, providing a valuable benchmark for comparing insurers, regardless of their country of domicile. Such a benchmark is increasingly important to an international market that looks for a strong indication of stability in the face of widespread deregulation, mergers, acquisitions and other dynamic factors.

A.M. Best assigns three types of ratings. All are independent opinions, based on a comprehensive quantitative and qualitative evaluation, of a company's balance sheet strength, operating performance and business profile. They are not a warranty of a company's financial strength and ability to meet either its obligations to policyholders or its financial obligations (view complete notice). 

  • Best's Financial Strength Ratings provide an opinion of an insurer's financial strength and ability to meet ongoing obligations to policyholders.
  • Best's Issuer Credit Ratings provide an opinion of an entity's ability to meet its senior obligations.
  • Best's Debt Ratings provide an opinion for the credit marketplace as to the issuer's ability to meet its financial obligations to security holders when due.

Our analytical process incorporates a host of quantitative and qualitative measures, including comparisons to peers and industry standards as well as assessments of an insurer's operating plans, philosophy and management.  A complete list of Best's Rating Methodologies is available and continually fine-tuned to reflect ever-changing industry, regulatory and legal developments, as well as changes in underlying business fundamentals.

Why is a Best's Rating Important?
For insurance companies, a Best's Rating is a strategic tool that can enhance consumer confidence in the organization's stability, as well as its attractiveness to investors. A rating also enhances an insurer's credibility with reinsurers; a valuable resource, particularly for insurers entering new markets.

Insurance professionals depend on Best's Ratings to determine the financial strength and operation of specific insurers, to evaluate prospective reinsurance accounts, to compare company performance and financial condition, and more. A Best's Rating can influence an agent's selection of plans to market.

In recent years, ratings also have become an increasingly important factor in consumers' decisions to purchase insurance. Today's insurance consumers are well aware of how regional, political and economic instabilities can affect a marginal company. Best's Ratings provide these consumers with the information necessary for an educated buying decision. In October of 1999, A.M. Best announced that it was offering company ratings and insurer profiles on its corporate Web site free of charge.

A.M. Best Company is committed to maintaining Best's Ratings as the definitive source for information on the financial condition and operating performance of insurance companies worldwide.