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Life insurance company ratings: What they tell you

Sep 29, 2021 4 Minute Read

Many of our day-to-day decisions rely on ratings. We look up reviews to help us decide how good a restaurant is, which cell phone to buy, or whether we’d like that new movie.

Ratings can also help us make much bigger life decisions, like which life insurance carrier to choose.

So, what can life insurance ratings tell us? They show how financially healthy a life insurance company is and whether they have the resources to pay out the benefits your family needs.

Here’s what you should know about ratings when shopping for life insurance.

How are life insurance companies rated?

Life insurance company ratings are provided by impartial third-party agencies. Each agency has different standards and uses its own proprietary life insurance ratings scale. They don’t all rate the same companies, and different agencies may assign different ratings to the same insurer. That’s why it’s important to understand how rating life insurance companies works and take multiple assessments into account when shopping for coverage.

Ratings agencies assess life insurance companies’ ability to meet ongoing insurance obligations and financial strength in the face of market and economic changes. These life insurance financial and credit ratings may even tell you if specific providers are dealing with serious business issues.

Let’s turn to the ratings scales of the four major life insurance ratings players.

A.M. Best

A.M. Best life insurance ratings are based on its Financial Strength Rating (FSR) Scale. The scale has six categories, ranging from Superior to Poor, and 14 ratings classes. Each rating is indicated using a letter and symbol system, with the highest rating being A++ and the lowest being D-.  They also have ratings E (under regulatory supervision), F (in liquidation), and S (ratings suspended) for insurance providers, so be sure to watch out for those, too.


Fitch’s life insurance company ratings are divided into two categories: long-term and short-term credit quality and financial strength. The highest long-term rating is AAA, indicating exceptional quality, and the lowest is D, indicating that the company is in serious financial trouble or about to close their business. Short-term ratings go from F1-D with the same criteria.


Like Fitch, Moody’s Insurance Financial Strength Rating (IFSR) determines insurance companies’ ability to repay short- and long-term debts, using two similar but differently coded systems. Long-term ratings are assigned using a 9-point scale ranging from Aaa to C, while short-term ratings can be labeled P-1 (Superior) to P-3 (Acceptable).

Standard & Poor’s

Better known as S&P Global, this agency uses a double and triple-letter rating system for insurance companies with 8 categories that start at AAA and end at CC. Ratings may include a “+” or “-” to indicate a company’s higher or lower place in a category. Similar to A.M. Best, the agency also has ratings for companies that may have defaulted on a policy or are going through bankruptcy (SD and D).

Why ratings matter

Life insurance allows you to create a safety net for those you love in case something happens to you. After you die, it’s up to the provider to pay out the death benefit that helps your family replace your income, pay bills, and save for the future.

Ratings shouldn’t be the only factor when choosing the best company to buy life insurance from. You’ll want to factor in other considerations, like their product options, prices, and customer service. Finding a provider that can live up to their end of the life insurance contract is critical.

Ratings agencies often have access to financial and business data that you don’t. They can tell you about a provider’s financial stability and give you a sense of which ones make the most reliable long-term partners.

After all, you could be working with your insurance company for decades. If they aren’t dependable, it won’t matter what great policies, coverage, or rates they offer.

As you begin researching potential providers, make sure to check each company’s ratings so you can make an informed decision.

How to find a company’s financial rating

To check out a life insurance company’s rating, go to the ratings agency websites to look up specific companies. You may have to register or pay a fee in some cases to gain access.

Here are a few other ways to access insurance provider ratings:

  • Search the company’s website for their most recent ratings and double-check that the information is current.
  • Contact the life insurance company directly and request their most up-to-date ratings.
  • Search for company reviews from trusted sources that include ratings.

Need help choosing the best life insurance company and policy for you? That’s what we’re here for. eFinancial works with top-rated providers to find the right type of coverage for you and your family. Call us at (877) 636-0123 or start your quote online today.


At eFinancial, our goal is to make life insurance simple, affordable, and understandable for everyday families. This content is intended for educational purposes only. Each post is carefully fact-checked, reviewed and updated regularly to ensure the information is as relevant as possible.