Know Which Type of Life Insurance Company Is Right for You

Shopping for life insurance can feel overwhelming at times. Not only do you want to find a life insurance company with high ratings, but you also want to make sure you find a company that meets your needs because not all A rated companies are right for everybody. Each life insurance company offers different products and has a different underwriting process. Those are only a few of the many differences. Did you know that life insurance companies are also categorized into two types? There are mutual life insurance companies and stock companies.

Which Type of Life Insurance Company Is Right for You?

Mutual insurance companies are owned by the policyholder. Contrarily, stock companies are owned by the stockholders. Neither type of insurance company is necessarily better than the other. There’s only one significant difference worth mentioning. If you’re interested in a particular life insurance product that has cash value, then a mutual company may be the better choice. The primary reason why someone would choose a mutual company for cash value products is because of the annual dividends that are returned to the policyholders.

How to Choose the Right Life Insurance Company

When deciding between a mutual or stock insurance company, keep in mind several key factors during the application process. First, you definitely want to meet with an independent broker, not a captive agent. A broker can present a variety of life insurance companies and products and more accurately help you find a policy that’s right for you. Then, you need to go through a needs-analysis with them. This process will not only help you determine which type of company to choose but also which type of product. Also, don’t be afraid to ask the agent some questions:

  • Why should I have life insurance?
  • How much insurance should I have depending on what my needs are?
  • What type of insurance – term, permanent, universal – is right for me?
  • What different products are available?
These questions should serve three purposes:
  • Help determine if you’ll qualify for the life insurance for which you are applying,
  • Determine what price you’ll end up paying for your life insurance, and
  • Help determine which life insurance company will be the right one for you!

Since insurance is oftentimes overwhelmingly confusing, we want to shed light on this industry by answering YOUR questions.  So if you have any questions or concerns, comment below and your question may be the topic of our next video!

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