Why should you be concerned about how an insurance company is rated? It's very simple... The foundation of a life insurance policy is its promise to pay your beneficiaries a death benefit if you pass away. If a company is poorly rated, their promise is diminished by a distinct lack of financial strength. Much like a bank will not consider loaning a customer money to buy a home if they don't have a job or if there is demonstrated irresponsibility-- it simply isn't prudent to pay premiums to an insurance company who demonstrates a similar strain of shortcomings.
Below is a table that provides the possibilities with respect to insurance company ratings. Seldom do we see companies prominent enough to consider offering with ratings below A- (A.M. Best).
| Insurance Company Rating Categories | ||||
| Rank Number | A.M. Best | Standard & Poor's | Moody's | Fitch |
| Financial Strength | Financial Strength | Financial Strength | Claims Paying Ability | |
| 1 | A++ Secure / Superior | AAA Extremely Strong | Aaa Exceptional | AAA Secure / Highest |
| 2 | A+ Secure / Superior | AA+ Very Strong | Aa1 Excellent | AA+ Secure / Very High |
| 3 | A Secure / Excellent | AA Very Strong | Aa2 Excellent | AA Secure / Very High |
| 4 | A- Secure / Excellent | AA- Very Strong | Aa3 Excellent | AA- Secure / Very High |
| 5 | B++ Secure / Very Good | A+ Strong | A1 Good | A+ Secure / High |
| 6 | B+ Secure / Good | A Strong | A2 Good | A Secure / High |
| 7 | B Vulnerable / Fair | A- Strong | A3 Good | A- Secure / High |
| 8 | B- Vulnerable / Fair | BBB+ Good | Baa1 Adequate | BBB+ Secure / Adequate |
| 9 | C++ Vulnerable / Marginal | BBB Good | Baa2 Adequate | BBB Secure / Adequate |
| 10 | C+ Vulnerable / Marginal | BBB- Good | Baa3 Adequate | BBB- Secure / Adequate |
| 11 | C Vulnerable / Weak | BB+ Marginal | Ba1 Questionable | BB+ Uncertain |
| 12 | C- Vulnerable / Weak | BB Marginal | Ba2 Questionable | BB Uncertain |
| 13 | D Vulnerable / Poor | BB- Marginal | Ba3 Questionable | BB- Uncertain |
| 14 | E Vulnerable / Under State Supervision | B+ Weak | B1 Poor | B+ Possessing Risk |
| 15 | F Vulnerable / In Liquidation | B Weak | B2 Poor | B Possessing Risk |
| 16 | S Rating Suspended | B- Weak | B3 Poor | B- Possessing Risk |
| 17 | CCC+ Very Weak | Caa Very Poor | CCC Substantial Risk | |
| 18 | CCC Very Weak | Ca Extremely Poor | DD Liquidating | |
| 19 | CCC- Very Weak | C Lowest | SR Suspended Rating | |
| 20 | CC Extremely Weak | |||
| 21 | R Regulatory Action | |||
| 22 | pi Based on public information only | |||
