There are many solid insurance companies. Much depends on the type of insurance you are seeking to buy, i.e. term, universal life, variable life, etc. Although most companies will offer all types, most of them specialize in certain ones. Another important aspect is your health. Some companies are more competitive with certain health conditions.

Few companies are competitive when it comes to smokers. However, some will offer nonsmoker rates for the first few years. If the tobacco use has ceased at some point, they will continue the nonsmoker rates. If the insured has not quit by that time, the rates will increase to smoker rates, which are usually 30 percent to 50 percent more.

You should check for financial stability by finding the "claims paying ability" rating from the independent rating agencies. They are A.M. Best, Duff & Phelps, Standard & Poors, Moody's and Weiss. The FDIC does not cover insurance companies, so this should be an important part of the selection process. Not all of the agencies rate all of the insurance companies. You should look for companies that are rated by at least three of the agencies, and fall in at least one of their four top categories. Sorry for such a long-winded answer, I have only touched on some of the basic areas we analyze. There is a lot to selecting the right company.

Answered by Carmen Petote, Certified Financial Planner Allegiance Financial Advisors, Inc.

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