An AM Best rating is an independent grade of an insurance company’s financial strength — its ability to pay out claims. When you buy final expense insurance (also called burial or funeral insurance), the carrier’s AM Best rating signals how reliably it can honor the death benefit years, or even decades, from now.
What does an AM Best rating actually measure?
An AM Best rating measures one thing: an insurance company’s financial strength — its ability to pay out claims when policyholders die. AM Best is a rating agency that focuses only on the insurance industry, so its grades are built around whether a carrier holds enough reserves and capital to keep its promises. The rating does not measure price, customer service, or how fast a claim is settled — only the company’s financial ability to pay. Because final expense insurance is a promise that may not be called on for many years, an independent broker will compare carriers side by side across their financial-strength ratings before recommending one.
What do the AM Best letter grades mean?
AM Best uses a letter scale called the Financial Strength Rating (FSR). Higher letters mean a stronger financial position. Here is the published scale:
| AM Best rating | What it signals |
|---|---|
| A++, A+ | Superior |
| A, A- | Excellent |
| B++, B+ | Good |
| B, B- | Fair |
| C++, C+ | Marginal |
| C, C- | Weak |
| D | Poor |
| E | Under regulatory supervision |
| F | In liquidation |
| S | Rating suspended |
Established carriers that sell burial and funeral insurance typically hold ratings in the upper tiers of this scale. The grades from E down are administrative flags, not everyday letter grades — they signal a company in serious trouble.
Why does an insurer’s rating matter for a lifetime policy?
Final expense insurance is a small whole life policy — it covers you for your entire life and locks in your premium, so the carrier may have to pay out 20 or 30 years after you sign. A strong AM Best rating is your signal that the company is built to still be there when that day comes. The death benefit is meant to cover real costs: the national median funeral runs about $8,300 for a viewing and burial (NFDA 2023). A financially strong carrier is far more likely to pay that benefit in full, on time, to your family. This matters just as much on a guaranteed-issue policy that skips health questions — its two-year graded death benefit only helps if the company is still standing to honor it.
What doesn’t an AM Best rating tell you?
A rating is one piece of the picture, not the whole decision. It does not tell you:
- The monthly premium, or whether the carrier is priced competitively for your age
- How the company treats customers, or how quickly it settles a claim
- Whether the policy’s waiting period, face amount, or health questions fit your situation
- How the carrier stacks up against others selling the same final expense insurance
That is why the rating is a floor, not a finish line — you weigh it alongside price, waiting period, and how the carrier’s health questions are worded.
How can I check a carrier’s AM Best rating before I buy?
You do not have to take a salesperson’s word for it. To confirm a carrier’s rating yourself:
- Ask your broker or agent for the carrier’s current AM Best Financial Strength Rating in writing.
- Look up the company for free at ambest.com, AM Best’s official site.
- Check the carrier’s own website — many publish their rating on an “About” or “Financial Strength” page.
- Confirm the rating is current, since AM Best reviews carriers and can raise or lower a grade over time.
A good independent broker does this legwork for you, lining up several carriers’ ratings, prices, and waiting periods so you can see the trade-offs in one place.
Before you lock in a policy, it pays to see how the carriers stack up — not just on price, but on the financial strength behind the promise. Take a moment to see how the carriers compare so you can choose one built to pay out when your family needs it most.