Annuity ratings can be helpful in finding the best annuity provider and plan. It's important to find a seller - usually an insurance company - that is financially sound and stable enough to meet its promises over the long term. Annuity ratings are provided by several professional ratings organizations, including A.M. Best Company, Moody's Investors Service, Standard & Poor's, Fitch, Inc., and Weiss Ratings, Inc. These organizations keep an eye on the financial condition of annuity providers and issue rankings of the firms. It's always best to select a highly rated insurance firm over a firm with low ratings.
What Do They Look For
The ratings services usually look at factors that include the ability of an insurer to pay claims, the insurer's financial strength as measured by the reserves stored to make payouts, the financial history of a firm that may show insolvency or inability to pay its debts in the past, and the soundness of the insurer's general account investments.
Ratings companies usually assign a letter grade to each insurer evaluated. A.M. Best is the oldest of the ratings services, and it focuses on measuring the relative financial strength of an insurer and its ability to make good on its promises with letter grades that range from A++ to C-. Fitch and Standard & Poor's measure the ability of an insurer to pay claims and use a system similar to that for rating bonds, with letter grades ranging from AAA to B-.
Typically, an insurance company with a high ranking at one ratings service will receive a similar rating at another ratings service, but since the services measure different things, rankings may vary. That's why it is recommended that you look at the rankings provided by different ratings firms.
Where to Get Annuity Ratings
Experts recommend checking the ratings provided by several ratings firms, since each one has its own methods for ranking the annuity providers, and the ratings companies may disagree about an insurer's rating as well. When looking for annuity ratings, choose companies that offer independent research over those that rely on data provided by the annuity sellers themselves.
Below you'll find the names, website addresses, and telephone numbers of several annuity ratings companies.
A.M. Best Company Inc. - (908) 439-2200
Fitch Ratings - (800) 75FITCH
Moody's Investor Services- (212) 553-0300
Standard & Poor's - (212) 438-7280
Weiss Ratings - (800)-289-9222
To read more annuity articles from Steven, and to get your free online annuity comparison, visit Annuity Rates
Annuity types have you confused? Use Steven's handy annuity investor guide to determine which annuity types is ideal for you: Guide to Annuity Types. Curious what annuities provider to choose? Visit Annuity Company Ratings.
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