The number of different insurance options can seem overwhelming. However, you should remember that all insurance serves the basic purpose of paying out a lump sum amount to your beneficiaries after you pass away.

While it is great that people are becoming aware of the need for insurance policies, choosing the right life insurance company is important. Let’s discuss exactly how to do this.

5 Factors To Consider When Choosing the Right Insurance Company in Canada

Choosing the right insurance company will ensure you get the most financial protection in your family’s time of need. While creditworthiness and online ratings are good starting points, they do not guarantee the best outcome.

For example, AIG was one of the most highly rated companies but failed to provide the same level of financial safety to its client when the crisis hit. How do you ensure your selected insurance company is the right choice?

We have compiled a list of key features to help novices and pros make informed decisions.

Find The Most Reputable Ones

One way to find the best insurance company is to ensure it's reputable. To learn about a company's reputation, consider the following points:

Check online reviews and recommendations: Before you look for a company, it is best to ask for your friends or family's recommendation. This way, you will be able to know the first-hand experience of its customers. If you can't find any, check online reviews and ratings, as it helps you gain some insights into customer services and product features.

Look them up in government directories: Contact your local insurance governing body to know more about the selected company. They have a database of licensed companies to ensure reliability and compliance with government policies.

Assess Its Financial Strength

Life insurance is a long-term investment into your future. A term policy covers you for up to 30 years, while a permanent is for a lifetime. Therefore, when choosing a company, you must ensure it is financially stable and strong enough to pay your death benefits to your beneficiaries.

You can check a company's financial strength at independent rating agencies like Better Business Bureau (BBB) with their own scoring criteria and grading methodologies. Ideally, the higher the rating points, the stronger the company will be financially and thus able to pay off its clients.

Review Customer Complaints and Evaluate Client Satisfaction

Just because a company has positive reviews on its website and social media pages doesn't mean it is right for you. Neither will its financial stability score ensure it will fulfill its financial obligations toward its customers. Therefore, you should look up customer rating scores at third-party websites for unbiased records.

These online bodies gather information and rate a company based on a few key points, such as customer support, price, product variations, offers and statements. Besides, you can even check customer review sites such as Trustpilot to know the common complaints about the selected insurance company.

Compare Company Products and Different Types of Policies

If buying an insurance policy for the first time, you must check and compare offerings from different companies. This will help you pick the best one. You should analyze a comprehensive list of different policies, such as term life insurance, permanent policy plan, whole life, universal and variable.

Ask the insurer how each of them work. This way, you can pick the policy plan that best suits your needs. Experts recommend choosing a company with a wider spectrum of product offerings, as it will allow a seamless transition if and when your needs change. However, you should always read the fine print to understand the terms and conditions of the selected policy.

Compare Multiple Quotes

Since you will be contacting various insurance companies to know about their products and offerings, you should also for quotes. Compare them online or use insurance comparison websites for cost vs. value analysis.

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Some insurance companies charge you less premiums but have certain coverage limitations based on your health conditions and age. While the requirements to set premiums vary from company to company, you must find the best value for money. If it seems challenging, talk to a broker who can get you multiple quotes and guide you on the best coverage options. You should also consider the free-look period, typically ten days. During this time, you can claim a full refund and cancel your policy with no questions asked.

Talking To An Advisor for An Expert Opinion

Finding the right insurance company can be complicated, especially for first-time buyers. But an expert insurance broker or advisor can help you skip the hassle. He will advise you on companies so you don't overpay for basic coverage. They will guide you and help you understand the value of the various features and benefits of multiple policies. Besides, he can help you customize plans tailored to your financial situation and pocket.

If an advisor works with multiple companies and earns a commission on every purchase, it is his responsibility to inform you for unbiased selection. It is best to ask them for customers' claims experience to ensure your family doesn't have to deal with prolonged payment delays after your demise. A professional advisor will ensure a hassle-free experience.

The Bottom Line

Choosing the right life insurance company isn't a one-size-fits-all approach. Your financial needs, budget, health and current circumstances play a major role in the coverage you receive on a policy. Besides, if you've got a good credit score, you will have lower premium rates which means less out-of-pocket cost.

Therefore, compare and analyze different companies, products and offerings before reaching a decision. Talk to independent insurance brokers and advisors for professional assistance.