Picking a life insurance company can be dicey with the wide range of choices available in the marketplace, rising uncertainties with recession and economic downturn. A family normally chooses their insurance company based on affordability of their life insurance quote. What we forget is that there are host of factors apart from price to consider while making this important decision.

• Product – Beyond the price difference, insurance products themselves vary with companies. Some companies offer term insurance with attractive options to convert into permanent insurance at a later date, some may not. You must decide which particular product details are important to you.



• Identity – Be sure you know the full name, home office location, and affiliation (if any) of any company you are considering since life insurance company names can be confusing, and different companies can have similar names. Figure out who you are dealing with and the reason: stability, goodwill, credibility of the company that you choose to buy life insurance from is a critical factor.



• Financial Solidity – It is the most crucial factor while selecting a life insurance company. One needs to be assured, despite good products, that the company is financially viable and strong enough to pay the claim(s). No guarantees are provided to life insurance policy holders so one must select a company that is financially sound. Ideal would be to stick with companies with solid ratings.



• Market ethics – There are life insurance companies that subscribe to the principles and codes of conduct of the Insurance Marketplace Standards Association, a non-profit organization that promotes ethical conduct in life insurance marketing.



• Advice and service – Service is hard to judge but what one can do is reflect upon the service you receive from the representative of the insurance company you’re dealing with.



• Claims – One could check the national claims database to see what kind of complaint information is received by the company. Also, your state insurance department may be able to advice you if the insurance company had many consumer complaints about its service relative to the number of policies it sold.

Premium, cost and protection – Keeping in mind the age, policy terms and conditions and the coverage and cost, compare it with similar plans. One must also remember that the “lower premium” policy may come with lower benefits. The solution to this dilemma is simple. Ask the insurance company to tell you the policy’s Net Payment Cost Index and its Surrender Cost Index. If you have chosen a policy for a specific term, use Surrender Cost Index.

However, if you have chosen to keep the policy indefinitely, use Net Payment Cost Index.