Long Term Care Insurance Company Ratings
Long term care insurance company ratings are an extremely important factor when making the decision of which carrier to use. Choosing a company with good ratings can make the difference between feeling secure in the knowledge that the insurer will pay and still be in business when and if the time comes for you to use your policy, and feeling uncertain about the future and what might happen. Of course, everyone wants to choose a company with good ratings; but how do companies get their ratings, who rates them and what do those all those letter and pluses or minuses really mean.
Who Are The Ratings Companies?
There are three different ratings companies that provide us with information on long term care insurance companies. They are A.M. Best Company, Standard and Poor’s and Moody’s. All three have similar though slightly different rating scales. So you’ll want to familiarize yourself with what each rating means. When using A.M. Best’s ratings, all A ratings, B++ and B+ are considered to be good, secure choices or long term care insurance providers. All other ratings from Best are considered vulnerable.
Standard and Poor’s ratings consider only the As to be secure and all others vulnerable. Moody’s has classed all A ratings, as well as BAA as strong, and the remaining ratings as weak. What on the surface looks to be similar ratings could be very different. However, even though their scales may be slightly different, their purpose is the same: providing a reliable, unbiased way to compare insurance companies and make an educated decision when purchasing long term care insurance.
How Do They Do It?
The ratings companies look at the financial strength of the long term care insurance companies they are rating to begin the determination of the grade each will receive. These include balance sheet figures and other items. They also look at how well the companies can meet their present obligations and how likely they are to be able to meet future obligations.
The evaluators then examine a company’s credit and debit ratings, in addition to how vulnerable they are to economic condition changes and underwriting changes. All of these combine to give each major insurance company a rating that consumers and other businesses can use in determining whether or not to deal with a specific insurance company.
Ratings companies provide a standard measure for comparing all insurance companies. With the same independent parties evaluating all insurance companies using pre-set criteria, ratings given by such companies can be trusted much more so than relative adjectives a company uses in its marketing tools. It is quite easy to refer to oneself as the best or the top in a certain area or to refer to its service as number 1 or A+. The true tale is told by outside ratings, not by marketers paid by companies to best present their products and services. This is the major strength of using ratings companies in making your long term care insurance decision.
If a company has very poor ratings or is unrated, it suggests that the company is not doing well and may not be in existence or able to meet its commitments for much longer. Conversely, if a company’s rating is very high, you can feel comfortable and secure in your decision to use the insurance company for their long term care insurance needs. Wouldn’t it make sense to know such valuable information before purchasing an insurance policy?
Insurance company ratings have become easier and easier to find since the Internet has become such an important part of our decision-making process. Ratings are often provided on an insurer’s home page, especially when their ratings are positive. Long term care insurance company ratings are also available from many other online sources as well, including from the websites of the ratings companies themselves; however, certain ratings companies do charge for their information.
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