Why can't I find a life insurance co on Yelp that has better than 1 to 1/2 stars?

[regmer]

I have gone through all the life insurance co's that are rated in the top ten as well as a few others and all--I mean ALL of them don't get better than 1 or 1 and a half stars on a 5-star rating system on Yelp. The vast majority of people who leave comments talk about how rotten the service is. I'd like to invest a substantial amount in an annuity but given how dishonest people say these co's are I have little confidence they will pay out the monthly payments to myself and my wife that they contract for. How can I get over this fear of trusting a life insurance co with my money when I can't find a single person who says anything good about their service? Can I trust that if I contact the state insurance commissioner to make a complaint the commissioner will do more than advise me to hire an attorney?

 

[qity]

@regmer Yelp is a giant racket. If you have a substantial amount of money to invest, Yelp may be the worst place to get advice.

The only people that will post on Yelp about a carrier had a bad experience.

Insurance is heavily regulated and is required to pay claims and keep your money safe.

I can't remember the last time I had an issue with a death benefit or annuity payout.

Just make sure that the company is highly rated and has been around for a while.

 

[regmer]

@qity Thank you.

 

[jeshurun1111]

@regmer Only disgruntled people care enough to leave a review for life insurance

 

[fendertele52]

@jeshurun1111 That, and most of the time when someone 'needs' the services of a life insurance company, they are already experiencing a low point in their lives; the money can never come fast enough.

 

[regmer]

@jeshurun1111 I see lots of 5-star reviews on various businesses, just not any for insurance co's. , oddly enough also for large appliance delivery companies.

 

[maxyss]

@regmer That would be an example of sampling bias.

 

[hannahjane]

@regmer Choose several highly rated mutual companies and shop around.

And by rated I mean Standard & Poor’s, Moody’s, Comdex, etc.

Everything @qity said is accurate.

 

[regmer]

@hannahjane Thank you.

 

[kingdomseeker7]

@regmer Stop trying to find companies and find an independent broker. Companies are going to force you to go through their sales reps. Brokers work for you and shop the market. You have no idea what you’re doing, I don’t care if you think you do - you don’t. There’s a reason you need a license to even speak to someone about insurance. Find a trusted independent broker - build a personal relationship and keep that person for life.

 

[regmer]

@kingdomseeker7 I admit this is all new to me so you are right, but I am trying to educate myself. So far I have figured that a fixed immediate annuity with a period certain of 20 years is the best fit for me since I don't expect to live even half that long. My wife will get the rest and she has her own funds. I figure I should stick with the top 10 such as MM, NYL, NWM, that caliber. My question just went to "Has there ever been a case where a perfectly healthy life insurance co like MM ever refused to pay out monthly payments on an annuity?"

 

[maxyss]

@regmer The question then would be how are life companies regulated and what associations guarantee what amount of their payments in the event of default? Further how are the associations funded and what legal rights do they have to levy fees to cover the shortfall of a defaulting company?

 

[kingdomseeker7]

All life companies are regulated at the state and federal level. If they don’t honor their contracts they can lose their ability to operate in that state.

They are self insured by the funding reserves they are required to have by law in dedicated cash accounts equal to their liabilities - unlike your local bank.

They are reinsured by reinsurance.

They are so secure that they are at the very top of the economic pyramid - they are literally what banks invest in.

I would trust my money in an annuity way before I would ever trust it in a bank.

 

[helenalindberg]

@regmer American Amicable is A rated for the BBB and it’s been in business for over 100 years. My best carrier

 

[resjudicata]

@helenalindberg The BBB along with Yelp is a racket. The more you pay to the BBB the better rating. Doesn’t mean anything.

 

[ativyl]

@regmer You are going to have to go very far down the list of life insurance companies from the top 10 to run into someone who is simply dishonest and won't make payments on an annuity. Insurance companies are not great about creating conflicts of interest between their sales force and their customers. But simply not paying on a life insurance claim, unheard of.

There are lots of insurance agents that specialize in annuities and have been in business for many years (example if you don't know of any: https://www.stantheannuityman.com/). I know lots of people who have bought SPIAs and deferred annuities. These guys are owned by Mass Mutual (https://www.blueprintincome.com/) who has been in business like 170 years. FWIW you'll notice they don't push Mass Mutual products they are meant to be a wrapper around less well rated companies.

 

[regmer]

@ativyl Why don't they push a solid company like Mass Mutual?

 

[ativyl]

@regmer SPIA is a commodity business. Customers who want an absolute assurance of payment even in the case of a severe prolonged depression over cheapest go to their agent and get a policy from NYLife, Mass Mutual, Guardian, Penn Mutual or Northwestern Mutual (the big 4 + Penn). Customers who want cheaper go a tier down in quality, and if they really push multiple tiers. But in terms of what you are worried about, not paying at all you would need to go way down on the list if it was even possible.

For example for a person born Jan 1st 1944 at $1m annuity Nationwide $9271. / mo vs Mass at $8183 / mo. I'll also mention their VUL product is my current favorite and I suspect their VA is designed similarly.

From Schwab I'm seeing a quote of $9923 which I assume is dropping a bit further in quality.

 

[regmer]

@ativyl Good info. thanks much.