Do ratings matter?

[shooter]

I am not a true final expense agent.
But I do enjoy reading the post and back and forth
between the different personalities.

One question that keeps going through my mind
would be the types of companies that most people seem
to write in this market.

Maybe it is a niche that some companies specialize in
and others don't.
But, with companies like Sons of Norway and KSKJ, I believe
that is the correct initials, plus a few others.
Their rating is very low.
One was a NR-5 I think and I couldn't find one on the other.

Some other companies that get brought up are B++ are less.

Clients don't mind, or understand?
E&O allows you to write these companies?
I know some are fraternal, is that an issue since they
issue certificate's not policies?

Just curious.
Shooter

 

[Allen Trent]

I am not a true final expense agent.
But I do enjoy reading the post and back and forth
between the different personalities.

One question that keeps going through my mind
would be the types of companies that most people seem
to write in this market.

Maybe it is a niche that some companies specialize in
and others don't.
But, with companies like Sons of Norway and KSKJ, I believe
that is the correct initials, plus a few others.
Their rating is very low.
One was a NR-5 I think and I couldn't find one on the other.

Some other companies that get brought up are B++ are less.

Clients don't mind, or understand?
E&O allows you to write these companies?
I know some are fraternal, is that an issue since they
issue certificate's not policies?

Just curious.
Shooter

Generally, in the final expense world I wouldnt think it would matter a ton as performance to illustrated values is a non-issue. Also, if the carrier was to become insolvent, the final expense death benefit amount should fall under each states Guaranty Association. (but keep in mind, being insolvent could cause some delays on payments, etc)

Lastly, if I recall, are fraternals part of the State Guaranty Associations? maybe that could be an issue

But compared to a $1m term carrier selection, or a max-funded WL/IUL carrier selection or a large Annuity carrier selection, I would think the financial ratings may not be of as much importance on small face final expense

 

[DonP]

It's matters to 1 out of 100 people . Fe premiums are guaranteed whole life . It's irrelevant wether the company goes under the death proceeds will be paid . Either the state fund will pay it or another insurer will buy them . With a Fraternal they can have an assessment fee that would come off the death benefits . I'm not sure if that's ever happened .

 

[Rearden]

Our clients don't care.

My wife says I'm A ranked =)

 

[Allen Trent]

Our clients don't care.

My wife says I'm A ranked =)

Are you sure she didn't say you are A****** ranked.

My wife said I am.....oh never mind I wasn't listening

 

[theinsuranceman]

As long as a carrier meets the requirements of the State Dept. of Insurance all is well. Rating companies like AM Best, Moody's, etc. are not that accurate. A carrier could be rated A- one day and then in receivership the next day. Settlers comes to mind.

 

[rousemark]

E&O allows you to write these companies?

One of the biggest misunderstandings ion the industry is the idea that E&O will not cover an agent in the event he/she use a B or C or even unrated company. If you get sued by a client from one of those companies your E&O will cover you the same as they would if it is an A rated company. The exception is if the suit arises out of the company going bankrupt or being placed into receivership. If that is the case, you are on your own. However, it would be hard for a client to win a suit on those grounds because the company was licensed and approved by the state.

 

[Baseball7]

Nope, this is absolutely not a concern in a final expense niche. The funny part is a lot of the companies that we sell actually have smaller home-office staffs than the marketing organizations that sell them.

 

[bboman23]

I am not a true final expense agent.
But I do enjoy reading the post and back and forth
between the different personalities.

One question that keeps going through my mind
would be the types of companies that most people seem
to write in this market.

Maybe it is a niche that some companies specialize in
and others don't.
But, with companies like Sons of Norway and KSKJ, I believe
that is the correct initials, plus a few others.
Their rating is very low.
One was a NR-5 I think and I couldn't find one on the other.

Some other companies that get brought up are B++ are less.

Clients don't mind, or understand?
E&O allows you to write these companies?
I know some are fraternal, is that an issue since they
issue certificate's not policies?

Just curious.
Shooter

You probably did more research to make this post than all FE clients I have ever written combined have researched. It doesn't matter in FE except when agents that lack sales skills will use a lower rated or non-rated carrier as being worse than their A rated carrier. Then they take Mary out of her 5 year old policy at $50 for $10,000 and get her a new $10,000 for $120. Those agents probably didn't even help her get the cash value out of her policy they are replacing.

Our clients don't care about ratings. I have never in my career been asked about the rating of a company. They will from time to time say, "I have never heard of Transamerica, is it a good company?"

 

[rousemark]

You probably did more research to make this post than all FE clients I have ever written combined have researched. It doesn't matter in FE except when agents that lack sales skills will use a lower rated or non-rated carrier as being worse than their A rated carrier. Then they take Mary out of her 5 year old policy at $50 for $10,000 and get her a new $10,000 for $120. Those agents probably didn't even help her get the cash value out of her policy they are replacing.

Our clients don't care about ratings. I have never in my career been asked about the rating of a company. They will from time to time say, "I have never heard of Transamerica, is it a good company?"

July will mark my 50th anniversary as an insurance agent. I do not remember a client or prospective client ever asking me about a company's rating. And, that is not just the FE folks.. I have sold health, Medicare supplement ancillary health life and none of them has asked.