The short answer is – there is no such thing as the “best life insurance company.” In Canada, there are 34 life insurance companies that offer a various suite of products. Companies are constantly updating their life insurance products and changing premium rates and that added to the sheer amount of companies available, it can be difficult to navigate and decide on the right life insurance company. There are definitely factors that differentiate life insurance companies, and it’s important to go the extra mile to ensure you’re making a sound financial decision when purchasing a product that will stick with you for at least 10 years, maybe life!
There are 3 main factors to consider when choosing the right life insurance company for your needs: strength and stability, value, and the suite of products. Let’s go over each one in a little more detail.
Strength & Stability
This is often the most overlooked part of deciding on life insurance coverage. The reason why the strength and stability of a life insurance company is so important is because of the long-term nature of life insurance. You want a company that will still be around in the next 100 years.
AM Best is a company that provides credit and financial strength ratings for the insurance industry. It can be useful to check out the rating of prospective companies to make sure they promise security for the future. If choosing between two companies and the premium is in the same ballpark, it always makes sense to choose the life insurance company with the highest rating.
Value is definitely the most looked at area of buying life insurance, and of course rightfully so. This is especially important for term insurance, which in reality, you never really want to collect on, so you want to pay the lowest premiums possible. I like to get away from the word “cheap” though. Some newer life insurance companies will set premium prices too low and can price themselves out of the business because they have little claims experience. If an insurance company goes belly up, a crown non-profit company Assuris will protect you for 85% of the promised death benefit.
Suite of Products
Term Insurance: term insurance policies come in various forms, but the most common are term policies that range from 5-100 years and everything between. As long as the life insurance company you’re considering for term insurance has a product that covers the term of the liability needed, you’re in good shape. One thing to note is that if you are looking to eventually convert your term insurance to permanent insurance, it must be within the same insurance company unless you have your health reassessed. It’s important to consider what permanent products a life insurance company has as well if you’re considering to convert your insurance in the future.
Permanent Insurance: It may seem simple, but behind the scenes, the way permanent life insurance is built and regulated is extremely complex. Permanent life insurance can be designed in a variety of ways, and each company designs their permanent products with slight nuances that make it more or less competitive in certain situations, such as how it’s considered for tax. It’s important to consult an insurance professional when deciding on a life insurance company.
Contact a Hero today to make sure that you are choosing the right life insurance quote and company to protect you and your family!