Life Insurance Company Ratings and Why They Matter Right Now

https://www.youtube.com/watch?v=deWEDJ4ysS0 Here's new life insurance company rating information for every wealth creator who wants to be certain that your savings are stable and guaranteed, so you can be sure the financial moves you make to gain safety really are solid and dependable, so you don't lose money or wonder if an economic crisis could collapse the pillar you're depending on. So here's where we are right now... We're in uncertain times. So, you're looking for financial guarantees, safety, confidence, and peace of mind. And you've heard that a whole life policy is a good place to store your cash. But you're wondering ... How do you know your savings in an insurance policy are secure and safe? How strong is the life insurance industry really? Could my insurer go out of business? What happens in the worst-case scenario? And how do I use life insurance company ratings to double-check my life insurance purchase to guarantee I'm making the most secure financial move? Today, we'll dig deep and answer these astute and pressing questions. Table of contentsWe'll Cover Three Key Life Insurance Company Ratings InsightsA Scary Bridge Taught Me About Verifying Financial StabilityWe had to decide if it was safe to cross.It's like that with our financial decisions.Life Insurance Company Ratings Are A Part of the Bigger Picture of Creating WealthInsight #1 - Compared To Commercial Banks And Investment Firms, Life Insurance Companies Have A Long History Of Financial Strength Under PressureInsight #2 - Life Insurance Companies Are Highly Regulated To Protect ConsumersBut What If An Insurance Company "Fails" and Becomes Insolvent?Let's Peek In On How Life Insurance Companies Handled the Great DepressionA Holiday That Wasn't a PartyThe Banking Holiday Spun Off an Insurance HolidayBut Here's the KickerInsight #3 - Life Insurance Carrier Ratings Are A Window Into The Soul of the CompanyThe Big ThreeAM Best and COMDEX ScoreHere's How to Navigate Life Insurance Carrier RatingsBut Even Life Insurance Carrier Ratings Aren't the Full StorySo, here's the bottom line for every wealth creator…Common Questions About Life Insurance Company RatingsWhat's the difference between company ratings and table ratings?Where can I actually check my life insurance company’s ratings?What if my insurance company's rating drops?How often should I check my insurer's rating?Article Resources We'll Cover Three Key Life Insurance Company Ratings Insights #1 - Compared To Commercial Banks And Investment Firms, The Life Insurance Industry Has A Long History Of Financial Strength Under Pressure #2 - The Life Insurance Industry Is Highly Regulated To Protect Consumers #3 - Insurance Carrier Ratings Are A Window Into The Soul Of The Company You'll also discover the difference between company life insurance ratings and table rating life insurance for individuals, helping you understand both sides of the financial strength equation. And, we'll also reveal the radical move the life insurance industry made during the banking holiday of the Great Depression. During one of the worst economic times during American history, insurers sunk the roots of their financial strength even deeper. But first, let me tell you about a time when ... A Scary Bridge Taught Me About Verifying Financial Stability When I was about 14, my Dad, siblings and I saddled up the horses and set off for an adventure. We'd set out a on a new route along our country gravel road, tracing the edge of the neighbor's field. An entrance to a snowmobile and four-wheeling trail beckoned us into an unfamiliar forested section of property. The invitation wasn't unusual, as we'd easily ridden hundreds of miles of trails through the rural Minnesotan woods. But today, as we came into a clearing, there stood a narrow wooden bridge that made us pull up fast. We had to decide if it was safe to cross. It was easily 9 feet over the ditch below, and probably 20 feet across. The kind that makes horses jittery and jumpy, and all the riders shake a little in their boots. The horses snorted, balked and showed the whites of their eyes in protest. Now walking on a wooden bridge is the equestrian equivalent of beating a hollow drum underfoot. It's one of the top potential obstacles to spook a horse, make them rear up and throw a rider. Or jump and stumble over the edge in fright and panic. It also may have loose or rotten boards the concentrated weight of a horse could easily puncture and fall through. While most of us voted to turn around, my dad never lost character as the brave one of our crew. He got down, tested the bridge on foot, tried to rock it, stomped around, and kicked at the planks to check for rotten boards. At last, we were pretty confident the bridge would hold. So, we coaxed the lightest, calmest horse across first while holding our breath. Finally, after they crossed without falling through or over the edge, the rest of us followed suit. I learned that when you’re placing your confidence on the intrinsic stability and certainty of a thing, you want to be absolutely sure that thing is really solid. It's like that with our financial decisions. If I'm going to put my confidence in the certainty of permanent life insurance, I want to be certain that it can hold me and protect my life savings, even in the worst case scenario. That's why we're talking about life insurance carrier ratings today. We're going to test out and explore how and why life insurers are financially strong and can back up their claims. Life Insurance Company Ratings Are A Part of the Bigger Picture of Creating Wealth Now, a big secret to understanding the strength of an individual insurance company lies in the ratings.   However, ratings are only a sliver of a much more substantial conversation about the strength of the life insurance industry overall.   And while the stability of the industry is a critical piece of protecting and preserving your wealth, it's just one small piece of the bigger journey to creating time and money freedom. That’s why we’ve developed the 3-step Cash Flow System. It’s your roadmap to go from just surviving, to a life of significance, purpose, and financial freedom.  The first stage is the foundation.  You first keep more of the money you make by fixing money leaks, becoming more efficient and profitable.  Then, you protect your money with insurance and legal protection and Privatized Banking.  Finally, you put your money to work, increasing your income with cash-flowing assets. Life insurance carrier ratings are an indicator of the strength of life insurance itself, which falls in the middle level of Protection. However, their impacts are far-reaching, spanning widely to improve every other area of your financial life. Insight #1 - Compared To Commercial Banks And Investment Firms, Life Insurance Companies Have A Long History Of Financial Strength Under Pressure The insurance industry has spanned nearly 200 years, weathering the Civil War, the Great Depression, and the Great Recession. For context, Penn Mutual was founded in 1848 (172 years ago) and Mass Mutual in 1851 (169 years ago). Both companies existed before and through the Civil War (1861 - 1865). Western and Southern began in 1888 (132 years ago), long before the Great Depression of 1929 - the late 1930s. The oldest life insurance company still in existence is Equitable Life Assurance Society. It was founded in the UK in 1762 (258 years ago). These life insurance rating agencies, which we'll discuss later have tracked many of these companies for over a century, consistently showing their financial strength through multiple economic crises. But not only have these companies stood over time, they've seen a lot through their years. And historically, life insurance companies have emerged from crisis financially sound, maintaining their core business of issuing policies, paying claims, and servicing in-force business. Want to see why? Insight #2 - Life Insurance Companies Are Highly Regulated To Protect Consumers The insurance industry is highly regulated, both at the federal and state levels. The primary oversight is by state insurance commissioners, and their collaboration through the National Association of Insurance Commissioners (NAIC). Consequently, insurance companies must then be licensed in each state and comply with each state's requirements where they want to do business. Additionally, insurance producers must also be licensed with each state. The regulators hold life insurance companies to a high standard with net worth requirements, risk-based capital tests, cash-flow testing, and layers of solvency surveillance that include third-party analysts, to maintain their fiscal integrity. Companies must carry capital reserves over and above their liabilities (which are primarily paying death claims). To increase the stringency, insurance companies must plan for more people to die, thus having more liabilities, and still maintain a cushion of capital beyond that inflated number. In fact, the top insurance companies have on average $107 for every $100 of claims that they have promised in the future. Some of the companies we work with even have $114 for every $100 of claims promised. Additionally, the insurance industry requires SAP (Statutory Accounting Principles). This method focuses on solvency - the ability to pay debts and have cash to pay for future needs - which are more conservative than the GAAP accounting every other industry uses. And what happens if they don't pass the tests? Regulators identify carriers that need rehabilitation. Then, the company can first voluntarily course-correct by cutting expenses, selling off pieces of their business, or considering a merger with a stronger company.