Why Insurance Financial Strength Ratings Matter

Iconic New York Life Building at 51 Madison Avenue

An insurance company rating is one of the key factors to understand when purchasing life insurance—a category that can be confusing. There are a variety of products, the amount of premiums you pay depends on your age and your physical health, and there are a lot of different insurance providers offering policies. It can be a challenge to figure out what type of insurance coverage you need, how much coverage you need, and the insurance rating of the company you get it from? That’s why getting professional guidance is so important.

Life insurance policy owners pay premiums to maintain a set amount of coverage.

A policy usually includes a life insurance benefit of a specific value that is paid to the policy owner’s beneficiary if the policy owner passes away. When that happens, a claim is submitted, and the benefit is paid. This can be a significant amount of money, which is why it’s so important for the insurer to have strong ratings that demonstrate the financial strength to fulfill its commitments. New York Life has maintained this type of financial strength for over 175 years.

There are four major credit rating agencies: A.M. Best, Fitch, Moody’s, and Standard and Poor’s. They provide information that helps the public to determine whether companies will be able to meet their financial obligations. Stellar financial ratings indicate that a company is in an excellent position to meet all of its financial obligations. Dicey ratings may indicate that a company could have problems down the road. Since life insurance is a long-term product, it’s essential that the company backing them have excellent insurance ratings. After all, the obligations that the company takes on today will have to be fulfilled—sometimes decades from now. So it’s essential that you choose a life insurance or annuity company that is built to last. Stellar ratings are a strong indicator that a company has that kind of strength.

So it’s essential that you choose a life insurance or annuity company that is built to last. Stellar ratings are a strong indicator that a company has that kind of strength."

New York Life has a diverse and conservatively invested financial portfolio that it regularly stress-tests to make sure its portfolio can withstand all manner of crises, from wars to pandemics to natural disasters. Another sign of New York Life’s financial strength is that it has paid dividends to its eligible participating whole life policy owners every year since 1854. In 2021, $1.8 billion was paid as dividends to New York Life policy owners.1

As a mutual company, New York Life answers to its policy owners—not by Wall Street.

So all of our decisions are centered on the long-term interests of our policy owners, not the short-term demands of outside investors. For over 175 years, we’ve honored the financial commitments made to our customers. Making sure the company can always deliver on its promises to help people be good at life and protect their loved ones has enabled New York Life to receive the highest financial strength ratings currently awarded to any U.S. life insurance companies from all four major ratings agencies.2

When you’re looking into purchasing a life insurance policy and trying to figure out the best type of coverage and the right insurer, it is imperative that the company you choose has a proven ability to meet its financial obligations to all of its customers. You want to put your trust in an insurance provider that will be as strong 100 years from now as it is today. 

Every day, New York Life makes sure that its policy owners have the confidence to build the best possible future for their loved ones. Our long history and strong credit ratings ensure that we’ll always be there for our customers.

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1New York Life Insurance Company (NYLIC) is a mutual life insurance company whose participating products are eligible to earn dividends. It is also the parent of domestic wholly owned stock subsidiaries whose products are not participating and not eligible for dividends. Dividends are not guaranteed.

2Individual independent rating agency commentary as of 9/30/21. A.M. Best (A++), Fitch (AAA), Moody’s Investors Service (Aaa), Standard & Poor’s (AA+).