How to Check Insurer's Safety

You buy life insurance in case something happens to you. But what if something happens to your insurance company? If you worry that your firm might fail, you should heed the safety ratings of A. M. Best Company, a publisher of insurance data. Every year, it assigns insurance companies one of nine grades ranging from "A plus" all the way down to "C ," which means fair.

A. M. Best bases its ratings on a thorough analysis of all factors affecting the insurer's financial stability, including policy renewal rates and performance of the firm's investments. An A plus is the surest guarantee you can get that a life insurance company will not fail.

You can get ratings of the companies you are interested in by writing to them, or from Best's Insurance Reports, available at public libraries. Or ask an insurance agent. He or she probably has a condensed version of the reports called Best's Agents Guide.