When a Disability Claim Can Last for Decades, Who Can You Count on to Pay It?

Financial stability is a must for any insurance company—and particularly essential for carriers who will have to pay long-term benefits like disability. When choosing a carrier, it is important to look for a company with a demonstrated record of financial strength.

Exemplary Ratings and Comdex Ranking

One of the best ways to evaluate an insurance company is to compare it to other insurance carriers. Independent third-party rating services like A.M. Best, Fitch, Moody’s, and Standard & Poor’s provide objective financial strength ratings.

Each rating agency uses a different rating scale; thus, examining these ratings individually is less important than examining how a given company compares to others.

A composite of a company's ratings is called the Comdex Ranking. This is not a rating but a percentile ranking on a scale of 1 to 100 (with 100 being the best) relative to other companies evaluated by at least 2 of the 4 rating agencies.

The following table shows the independent agencies' ratings for the listed companies and the composite of those ratings in the Comdex Ranking.

Top Ratings Do Not Mean The Right Policy

Having superior financial ratings is very important because it shows a company's ability to pay claims over the long term. You must remember that a company can have excellent ratings and still offer a less-than-attractive policy. It is the language in the policy itself that determines whether or not an individual disability insurance policy will pay benefits during an accident or illness. When you buy disability insurance, evaluate the policy's provisions first, then find the best contract for you, and make sure the company has excellent financial ratings to back it up.