Ratings Methodology for Life Insurance
NerdWallet's ratings for life insurance companies take into account the following details about each insurer:
- Financial strength.
- Consumer complaints.
- Policy transparency.
- Ease of communication.
The best life insurers have the financial strength needed to support customers for decades. They keep customers happy and provide multiple communication channels to answer questions. They also provide life insurance shoppers with information about all the options available to them without making buyers jump through complex hoops.
Data collection and review processWe collect data points for each insurer from its public-facing websites and from company representatives, public filings, state regulator data and third-party analyses. These data points are then compared against one another and against NerdWallet's standards for good insurance companies to determine a star rating.
Data is collected on a regular basis and reviewed by our editorial team for consistency and accuracy. Final star ratings are presented on a scale of one to five stars, where a one-star score represents "poor" and a five-star score represents "excellent."
The reviews teamThe writers and editors behind our life insurance reviews are insurance specialists who have had their work featured by or appear in The Associated Press, The Washington Post, The New York Times, the Chicago-Sun Times, U.S. News & World Report and the Society for Advancing Business Editing and Writing. Each writer and editor follows NerdWallet’s strict guidelines for editorial integrity.
In addition to life insurance, the team covers homeowners insurance, renters insurance and auto insurance.
Our star ratings are weighted based on our editorial and professional opinions. We use the following weightings when rating life insurers:
- Financial strength (40%).
- Consumer complaints (40%).
- Policy detail availability (10%).
- Range of communication channels (10%).
Consumer complaints: These ratings are based on complaints to state regulators relative to a company’s size. NerdWallet examined complaints received by state insurance regulators and reported to the National Association of Insurance Commissioners in 2018-2020. To assess how insurers compare to one another, the NAIC calculates a complaint index each year for each subsidiary, measuring its share of total complaints relative to its size, or share of total premiums in the industry. To evaluate a company’s complaint history, NerdWallet calculated a similar index for each insurer, weighted by market shares of each subsidiary, over the three-year period. Ratios are determined separately for auto, home (including renters and condo) and life insurance.
Policy detail availability: Ideally, a consumer should be able to find basic policy details on an insurer’s website. Our methodology gives higher scores to transparent insurers who include information about their policy options, coverage amounts and term lengths (if applicable) and clearly display these details in easily accessible places on their site.
Range of communication channels: Insurers who allow consumers to contact them by email, phone and live chat earned the highest scores.