Life insurance company ratings measure an insurer’s financial strength, meaning its ability to pay claims for decades. AM Best’s top grades are A++ and A+ (Superior), followed by A and A- (Excellent). S&P, Moody’s and Fitch use different letter scales. Look for strong ratings from more than one agency, then compare complaint records and prices.
Last updated: November 2026
When you buy life insurance, you are trusting a company to pay your family years or even decades from now. Independent rating agencies study insurers’ balance sheets, business performance and risk management and publish an opinion of their financial strength. These ratings are one of the most useful tools for comparing the best life insurance companies, but they are easy to misread. This guide explains each major rating scale, what the grades mean and how to use ratings alongside other information when you choose a policy.
Key takeaways
- Financial strength ratings estimate an insurer’s ability to meet its obligations to policyholders. They are not a measure of price or customer service.
- AM Best is the agency most associated with insurance. Its A++ and A+ grades are labeled Superior.
- S&P, Moody’s and Fitch also rate many large life insurers, each with its own letter scale.
- Ratings apply to a specific legal company. Subsidiaries of the same group can carry different ratings.
- Combine ratings with the NAIC complaint index, the products you need and real quotes.
What a life insurance company rating means
A financial strength rating is an independent opinion about whether an insurer can pay policyholder claims and obligations. Rating agencies look at factors such as capital levels, investment quality, profitability, business mix and how the company manages risk. A high rating suggests the agency believes the insurer is well positioned to keep its promises even in difficult economic conditions.
A rating is not a guarantee, and it does not tell you whether a company is the cheapest, the easiest to buy from or the best at handling customer service. It answers one important question: how financially solid is the company behind your policy?
The AM Best rating scale
AM Best focuses on the insurance industry and rates thousands of insurers. Its financial strength rating grades are:
| AM Best grade | Descriptor | What it suggests |
|---|---|---|
| A++, A+ | Superior | Strongest ability to meet ongoing obligations |
| A, A- | Excellent | Very strong ability to meet obligations |
| B++, B+ | Good | Solid ability to meet obligations |
| B, B- | Fair | Adequate ability, but vulnerable to adverse changes |
| C++, C+ | Marginal | Limited ability, vulnerable to adverse changes |
| C, C- | Weak | Weak ability, very vulnerable to adverse changes |
| D | Poor | Very weak ability, extremely vulnerable |
The plus and minus signs are called notches and show smaller differences within a grade. AM Best also publishes an outlook, such as stable, positive or negative, that signals the possible direction of a rating. Many comparison sites only feature life insurers rated A- or better.
S&P, Moody’s and Fitch scales
Three large global credit rating agencies also assign insurer financial strength ratings. Their scales look different, but the logic is similar: the higher the letter, the stronger the insurer in the agency’s opinion.
| Strength level | S&P Global | Moody’s | Fitch |
|---|---|---|---|
| Highest | AAA | Aaa | AAA |
| Very strong | AA+, AA, AA- | Aa1, Aa2, Aa3 | AA+, AA, AA- |
| Strong | A+, A, A- | A1, A2, A3 | A+, A, A- |
| Good / adequate | BBB+, BBB, BBB- | Baa1, Baa2, Baa3 | BBB+, BBB, BBB- |
| Below investment-grade style levels | BB and lower | Ba and lower | BB and lower |
An important point: an A+ from S&P is not the same as an A+ from AM Best. On AM Best’s scale, A+ is the second-highest grade, while on S&P’s scale it sits in the third tier, below AAA and the AA range. Always read a rating together with the agency that issued it.
Example ratings for well-known life insurers
Ratings change, so treat any published rating as a snapshot. Here are examples we confirmed from public rating announcements:
| Insurer | AM Best financial strength rating | Source and date |
|---|---|---|
| Mutual of Omaha Insurance Company and its life subsidiaries | A+ (Superior), stable outlook | AM Best affirmation reported April 2, 2026 |
| Guardian Life Insurance Company of America | A++ (Superior), stable outlook | AM Best affirmation, September 2025 |
For a broader shortlist with ratings, policy types and buying options, see our comparison of the best life insurance companies in the USA and our Mutual of Omaha review. As of November 2026, check the rating agency directly for the current rating before you buy.
The NAIC complaint index
Financial strength is only part of the picture. The National Association of Insurance Commissioners (NAIC) publishes complaint data that compares the number of complaints against an insurer with what would be expected for a company of its size. The baseline is 1.0:
- Below 1.0 means fewer complaints than expected.
- Above 1.0 means more complaints than expected.
Look at several years and the specific product line, such as individual life, because one year can be distorted by a small number of complaints. Your state insurance department may also publish complaint information.
Customer satisfaction studies
Some research firms, such as J.D. Power, publish customer satisfaction studies for life insurers. These surveys measure experience with things like communication, price, product offerings and claims. They are useful for comparing service but do not replace financial strength ratings.
How to check an insurer’s rating yourself
- Find the exact company name. Your quote or policy illustration should list the legal name of the issuing company, which may differ from the brand name.
- Search the rating agency. AM Best, S&P, Moody’s and Fitch publish ratings on their own websites. Some require a free account to see details.
- Check the insurer’s ratings page. Many insurers list their current ratings, but confirm them with the agency.
- Look at the outlook and date. A negative outlook or an old rating is worth a follow-up question.
- Review complaints. Check the NAIC complaint index for the same company.
How much should ratings matter when you choose?
For most buyers, a sensible rule is to shortlist insurers with an AM Best rating of A- or higher, ideally A or above, and then compare on everything else. Among strongly rated companies, the differences that matter most to you may be:
- Price. Premiums vary widely by age, health, tobacco use, term length and coverage amount. See how much life insurance costs.
- Products. Not every insurer offers no-exam term, final expense or guaranteed issue coverage. Read our guides to no medical exam life insurance and term vs. whole life.
- Underwriting. Some companies are more flexible with certain health conditions.
- Buying experience. Online application, agent support and claims process.
Our guide on how to choose a life insurance company walks through the full process.
Mutual vs. stock insurers and ratings
Life insurers are often organized as mutual companies, owned by policyholders, or stock companies, owned by shareholders. Both types can earn top ratings. Mutual insurers may pay dividends on eligible permanent policies, but dividends are not guaranteed. Stock insurers may raise capital from investors more easily. Ownership structure alone does not tell you which company is stronger; the rating agencies weigh capital, earnings and risk regardless of structure.
Red flags to watch for
- No rating at all. Very small or new insurers may not be rated by any major agency. That is not automatically a problem, but it gives you less independent information.
- A recent downgrade or negative outlook. Ask the agent why and whether it affects the product you are buying.
- Ratings quoted without a date or agency. A sales page that says “A+ rated” without naming the agency may be mixing scales.
- The rating belongs to a different company. A brand may advertise its parent’s rating while the policy is issued by a subsidiary with a lower rating.
- High complaint ratios. A strong balance sheet with many complaints can signal service or claims problems.
Ratings and the type of policy you buy
Financial strength matters more the longer you expect to rely on the insurer. A 10-year term policy is a shorter commitment than whole life or guaranteed universal life that you may keep for 40 years or more. If you are buying permanent coverage, cash value life insurance or a large policy, give extra weight to strong ratings from more than one agency. For small final expense policies, also pay close attention to claim handling and complaint records, since beneficiaries usually need the money quickly.
What happens if an insurer fails?
Insurer failures are rare, and states have guaranty associations that provide a safety net up to limits set by state law. Those limits vary by state and may be lower than your policy’s face amount, which is one reason financial strength ratings matter, especially for large policies or permanent coverage you plan to keep for life. Check your state’s guaranty association for its current limits.
Frequently asked questions
What is the best rating for a life insurance company?
On AM Best’s scale, A++ is the highest financial strength rating, followed by A+. Both are labeled Superior. On S&P and Fitch scales, AAA is the highest; on Moody’s scale, Aaa is the highest.
Is an A rating from AM Best good?
Yes. AM Best describes A and A- as Excellent, indicating a very strong ability to meet obligations. It is one step below the Superior grades.
Which life insurance companies have the best ratings?
Several large U.S. life insurers hold AM Best’s top grades. For example, Guardian’s A++ rating was affirmed in September 2025 and Mutual of Omaha’s A+ rating was affirmed in April 2026. Our best life insurance companies guide compares more insurers. Always confirm the current rating.
Do ratings affect what I pay?
Not directly. Your premium depends mostly on your age, health, coverage amount and policy type. Highly rated companies are not always the most expensive, so compare quotes from several strong insurers.
Why does the same company have different ratings?
Each agency uses its own methodology and scale, and ratings apply to specific legal entities. A parent company and its subsidiaries can carry different ratings.
How often do ratings change?
Agencies review insurers regularly and can upgrade, downgrade or change an outlook at any time. Check the date of any rating you see quoted.
Should I avoid insurers rated below A-?
Many buyers and comparison sites prefer A- or higher, particularly for long-term or permanent policies. A lower rating is not automatically a reason to avoid a company, but it deserves extra research and a comparison with strongly rated alternatives.
Read also
This article is for general information only and is not insurance, financial or legal advice. Ratings, products and rules change. Confirm current ratings with the rating agency and speak with a licensed agent before buying a policy.
