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Understand AM Best’s Life Insurance Company Rating System

Life Insurance Company Rating

Life Insurance Company Rating Systems help determine how financially secure your life insurance company is. How will you know if they will be able to secure the financial future for your family when you’re gone? You can find out by using industry-standard credit rating systems such as A.M. Best, Standard and Poor’s, and Moody’s Investors Services.

A.M. Best Company sets the standard for credit ratings for the insurance industry and has been issuing credit ratings since 1906. A.M. Best focuses exclusively on the Insurance industry and is most commonly cited as a source for ratings for the industry.

These ratings are especially important when it comes to Life Insurance Companies because it may be a long time before you’ll need a payout for your policy and you’ll want to make sure that the insurance company is secure enough to pay out on your policy in 20 – 30 or more years from now. You need to know that you can rely on them now and in the future, and the A.M. Best’s Rating system will tell you how sound they are.

A.M. Best Rating System is based on the following criteria:
  • The strength of the company’s balance sheet
  • Operating Performance
  • Business Profile
  • And, sometimes debt security
A.M. Best Ratings
  • Helps to protect consumers
  • Sets a high standard of creditworthiness for Insurance Companies
  • Holds Insurance Companies accountable for their financial performance
  • A.M. Best’s Ratings are independent. They do not imply a warranty or endorsement of any company
Below is an overview of their ratings

Ratings from A++ to B+ indicate financially strong companies that can meet their obligations to their policyholders now and well into the future.

  • A++ and A+: Superior performance.
  • A and A-: Excellent Performance.
  • B++ and B+: Very Good

Life Insurance company rating that ranges between B (less vulnerable) and F (most vulnerable) are less financially secure and according to the A.M. Best Rating system, they are the most susceptible to financial problems in the future.

  • B and B-: Adequate
  • C++ and C+: Fair
  • C and C-: Marginal
  • D:  Very Vulnerable
  • E:  Under State Supervision
  • F: In Liquidation

Additional Resources:

The history of A.M. Best Company 

Check the A.M. Best Rating of your insurance company

To consult with a life insurance advisor, call 800-392-6532 or email

This article is for informational purposes only. Insurance needs and coverages vary; therefore, the terms of your policy will be specific to your situation. We recommend that you discuss your insurance needs with a licensed agent for details on pricing, coverages, and exclusions.