How Life Insurance Company Ratings Help You Choose
July 21, 2026 | Eric Baker
Buying life insurance can be a challenging task; you either don't give it much thought and end up with coverage you don't have confidence in, or you overanalyze everything to the point of feeling overwhelmed.
One component that often does not get the attention it should is the rating of the insurance company you are getting coverage from. In this blog, our professional insurance advisors at Twin City Underwriters explain what life insurance company ratings are, how they can guide your decision on coverage, and how to make an informed choice that can significantly impact the lives of those you care about most.
What Life Insurance Ratings Actually Measure
When you are making a purchase, you look at the ratings on Amazon, and when you are going to eat at a restaurant, you look at the reviews on Yelp. When you are purchasing a life insurance policy, one of the steps is looking at the ratings of the company issuing the policy.
However, life insurance company ratings aren't as clear-cut as scanning through Google reviews online. Life insurance company ratings aren't a single score but rather four different grades from four different rating agencies, each measuring different things.
As we will highlight in more detail below, each rating company looks at different details. Some focus primarily on financial strength and the ability to pay future claims, while others place more emphasis on creditworthiness or customer satisfaction. That's why it's important to look beyond a single grade when evaluating an insurer. Looking at multiple ratings together can help you better understand a company's financial health, customer experience, and long-term reliability.
Life Insurance Rating Agencies
There are four independent agencies that rate the financial strength of insurance companies.
The Four Major Agencies
AM Best
Focuses exclusively on insurance companies, evaluating their financial strength and ability to pay claims. AM Best ratings range from A++ (Superior) to D (Poor) and are among the most widely recognized in the insurance industry.
Moody's
Measures an insurer's financial stability and long-term creditworthiness. Moody's ratings range from Aaa (Highest Quality) to C (Lowest Rated) and help assess a company's ability to meet its financial obligations.
S&P
Looks at an insurer's financial strength and its ability to meet obligations to policyholders. Ratings range from AAA (Extremely Strong) to D (Default) and can help consumers gauge a company's overall financial stability.
Fitch
Evaluates an insurer's financial health, credit quality, and ability to meet its financial commitments. Ratings range from AAA (Highest Credit Quality) to D (Default) and offer another perspective on a company's long-term financial outlook.
Source: InsuranceBuisnessMag.com
Different Companies and Their Different Ratings
While ratings can be very insightful when it comes to assessing an insurer's overall stability and reputation, they are considered an opinion, and ratings for the same insurance company can differ among rating agencies.
It's important to note that each agency has its own rating scale and rating standards, and although each service uses an alphabetical rating scale, an A+ from one agency may not mean the same as an A+ from another.
Download our free life insurance basics e-book and learn about the different types of life insurance policies.
What Do Life Insurance Ratings Mean?
As previously mentioned, each rating agency uses its own scale and definitions. The examples below are simplified to help consumers compare ratings in plain language. When assessing ratings, we advise looking closely at each agency to understand what they rate and what their scales mean.
| Rating | Meaning | What It Implies |
| A++ / AAA / Aaa | Exceptional | Extremely strong financial stability and a very high ability to pay on future claims |
| A / AA | Excellent | Strong financial standing and low risk of financial trouble |
| B / BBB | Good | Adequate ability to meet financial obligations, but more vulnerable |
| BB / C or below | Fair to Weak | Higher risk and less financial security |
| D | Poor or Default | Serious financial concerns or inability to meet |
Source: InsuranceBuisnessMag.com
What Else to Look at Alongside Ratings
Ratings are helpful, but not the whole picture when it comes to insurance companies.
Some other considerations worth looking into:
- How long has the company been in business?
- NAIC complaint ratio: how often customers complain about a company compared to its size in the market.
- J.D. Power satisfaction scores: how satisfied policyholders are with the company.
Compare Life Insurance Options With Confidence
Looking at insurance company ratings is just one part of the puzzle when it comes to purchasing life insurance coverage. In a situation where the life insurance policy type and premium price are the same, rating profiles can help you make a decision between two options.
Working with a life insurance broker can be a significant advantage to comparing policy types and insurance companies and their reputation, so you can be confident in your coverage. At Twin City Underwriters, we have been helping individuals with their insurance needs for nearly 60 years.
We’re not just here to sell you a life insurance policy; we’re committed to being your long-term partner. As life changes and questions arise, you’ll have a knowledgeable expert on your side to help guide you. With something as important as life insurance, ongoing support makes all the difference.
Sources:
https://www.insurance.com/insurance-company-financial-ratings
Choosing a life insurance plan can be difficult. Working with an insurance broker can help you find a plan that fits your needs. Schedule a one-on-one meeting with one of our life insurance brokers to get your insurance questions answered!