At Policygenius, our life insurance company reviews include financial health and consumer satisfaction ratings by a number of third-party organizations, like the Better Business Bureau (BBB).
The BBB is a nonprofit organization founded in 1912 focused on helping consumers find businesses they can trust. It provides information about a company’s customer reputation to help you make informed buying decisions and helps to resolve official complaints against companies. The BBB gives life insurance ratings to companies from A+ to F based on the value of the insurer’s customer service.
When researching life insurance companies, it’s important to look for a company that’s financially stable (through reviews by A.M. Best, Moody’s, and Standard & Poor’s) to know how reliably it will pay your death benefit. A strong customer service rating is also important to ensure your loved ones receive consistent and expedient customer care in the event of your passing.
Life insurance terms you should know
Beneficiaries: The people you name on your life insurance policy to receive the lump sum of money — also known as the death benefit — when you die.
Cash value: The portion of a permanent life insurance policy’s monetary value that grows tax-deferred over the life of the policy.
Death benefit: The amount of money the life insurance company will pay your beneficiaries when you die.
Face amount: The dollar amount, or death benefit, your beneficiaries receive if you die while your life insurance policy is active.
Insured: The person who is covered by the insurance policy.
Policy: The legal document that includes the terms and conditions of your life insurance contract.
Policyholder: The person who owns an insurance policy. Usually, this is the same person as the insured.
Permanent life insurance: A type of life insurance that lasts for the rest of your life and usually includes a cash value account.
Premium: The amount you pay your insurance company to keep your coverage active. Premiums are typically paid monthly or annually.
Riders: Add-ons to a life insurance policy that provide more robust coverage, sometimes for an extra cost.
Term life insurance: A life insurance policy that lasts for a set number of years before it expires. If you die before the term is up, your beneficiaries receive a death benefit.
Underwriting: The process where an insurance company evaluates the risk of insuring you and determines your final rate.
Why Better Business Bureau ratings matter for life insurance shoppers
When you’re comparing life insurance policies, it can be hard to decide which provider is the best one for you. You’ll want to choose a company with affordable premiums and reliable financials, but remember that your beneficiaries will be working with your life insurance provider while grieving your passing.
Choosing a company with a strong record of handling claims and complaints quickly and fairly can provide your loved ones with peace of mind.
BBB ratings don’t just measure customer service interactions, but how much you can trust a business to serve you overall. The ratings reflect data including complaints a company has received, how quickly and successfully they resolve those complaints, the company’s transparency, and any government actions against the company.
This information is good to know for any business, but it’s especially useful if you’re considering a smaller or newer life insurance company that has fewer customer reviews to rely upon.
While a strong BBB rating is always a plus, it can be difficult to find a reliable rating. Most major insurance companies have multiple BBB ratings depending on location. By working with an independent broker such as Policygenius, you can get dependable customer service no matter where you live.
Learn more about the best life insurance companies of 2024
How the Better Business Bureau determines its ratings
The Better Business Bureau assigns every business a number of points from 0-100 based on their reliability and trustworthiness, which translates into a letter grade from F (0-59.99) to A+ (97-100). The higher the points and better the grade, the more dependable the BBB considers a company.
The BBB compiles information provided by businesses, from consumer complaints, and from other public data sources to evaluate companies using seven main criteria. [1]
BBB complaint history: This includes number of complaints, whether complaints are resolved, how quickly complaints are resolved, and whether there are patterns in customer complaints.
Type of business: Businesses that may violate the law or frequently cause issues to consumers and the marketplace will lose points.
Time in business: Businesses that have been operating longer receive a higher score.
Transparent business practices: Businesses that don’t offer clear information about their products and services or basic information like business addresses will score lower.
Failure to honor commitments to the BBB: Businesses that fail to follow through on settlements in disputes settled by the BBB will lose points.
Licensing and government actions: This includes certifications and licensing requirements for businesses and any government actions against the business that reflect poorly on its ethics and reliability.
Advertising issues: This includes accuracy of claims made in consumer advertising.
While some businesses are accredited by the BBB and others are not, accredited businesses are simply those that have gone through the organization’s accreditation process, which requires businesses to meet and maintain a set of BBB standards. [2]
However, a business is not necessarily untrustworthy just because it’s not accredited by the Better Business Bureau.
The BBB strongly recommends doing additional research into any company before giving them your business. The organization’s ratings are one indicator of a company’s dependability, but a BBB rating is not a guarantee.
Better Business Bureau rating points
The table below reflects each category the BBB considers and the minimum and maximum number of points a business can earn in each category.
Category | Points |
|---|---|
Complaint volume (weighted by age) | 0 to 15 |
Unanswered complaints | 0 to 40 |
Unresolved complaints | 0 to 30 |
Complaint resolution delayed | 0 to 5 |
Failure to address complaint pattern | -31 to 0 |
Type of business | -41 to 0 |
Time in business | 0-10 |
Transparent business practices | -5 to 0 |
Failure to honor mediation/arbitration | -41 to 0 |
Competency licensing | -41 to 0 |
Government action (per action) | -34 to 0 |
Advertising review (per incident) | -41 to 0 |
BBB trademark infringement | -41 to 0 |
Better Business Bureau letter rating scale
The table below shows how point totals translate into the BBB grade for a company. Businesses without a rating (marked NR by the BBB) have not provided enough information for the organization to assign a score.
Points | Letter Rating |
|---|---|
97-100 | A+ |
94-96.99 | A |
90-93.99 | A- |
87-89.99 | B+ |
84-86.99 | B |
80-83.99 | B- |
77-79.99 | C+ |
74-76.99 | C |
70-73.99 | C- |
67-69.99 | D+ |
64-66.99 | D |
60-63.99 | D- |
0-59.99 | F |
