What do these ratings measure? A life insurance company’s relative ability to meet their financial obligations.
What should you use these ratings for? When comparing insurance companies probably financial strength should be the first thing to look at. Typically insurance company ratings use a letter grade. Each rating service is a little bit different.
Moody's ratings start at Aaa, then go to Aa1, Aa2, Aa3 and then to A1, A2 etc.
Standard and Poor's ratings are AAA, then AA+, AA, AA- then A+ etc. That last one can sometimes be misleading. Years ago an insurance company came out with a big ad that said A+! but when you read the fine print it was an A+ from Standard and Poor's and in actuality is the 5th rating from the top.
A.M. Best rates insurance companies starting with A++ to A+ and then letter grades like school grades from then on (A, A-, B+, B etc.)
There are also Weiss Ratings which are also letter grades and Fitch ratings which are similar to the Standard and Poor's set up.
For more information on life insurance companies, ratings and life insurance quotes, it’s best to contact a trusted life insurance agent.
