When families purchase preneed insurance, they’re placing trust in a company to provide financial support years, and sometimes even decades, into the future. That’s why financial strength ratings matter. These ratings, issued by independent agencies, help measure an insurer’s ability to meet its long-term obligations and remain financially stable through changing economic conditions.

Understanding how financial strength ratings work can help funeral professionals make informed decisions when selecting a preneed insurance provider, offering greater confidence that funds will be available when they’re needed most.

What is an AM Best financial strength rating?  

AM Best is a credit rating agency focused on the insurance industry. It is the world's oldest and most authoritative insurance rating and information source. Its financial strength ratings are designed to evaluate an insurance company’s ability to meet their ongoing obligations to policy owners.

These ratings consider factors such as financial performance, operating stability, reserves and long-term outlook. For funeral professionals, they provide an independent assessment of an insurance provider’s financial health and reliability.

What is Homesteaders financial strength rating?

AM Best Company has affirmed Homesteaders Life Company’s financial strength rating of A- (Excellent) with a stable outlook, effective May 2026. AM Best has affirmed this rating for 15 consecutive years.

Why do financial strength ratings matter for preneed insurance providers?

Preneed insurance is built on long-term trust. Families expect that the policy they purchase today will provide reliable benefits in the future, making the financial stability of the insurance provider an important part of the conversation.

Strong financial ratings can help reinforce confidence for both funeral professionals and families. They indicate that an insurance company is positioned to manage obligations responsibly and continue serving policy owners over time.

How can funeral service providers use financial ratings when evaluating partners?

Financial strength ratings provide funeral service providers with an additional layer of insight when evaluating preneed providers. While service, support and technology all matter, long-term financial stability should also be part of the decision-making process.

Reviewing ratings can help funeral homes better understand the overall strength, consistency and outlook of a provider before entering or continuing a partnership.

How do financial strength ratings support long-term preneed growth?

A strong financial foundation benefits more than individual policy owners — it also supports long-term business growth for funeral homes. Stable insurance partners can provide consistency, ongoing investment and confidence that supports stronger relationships over time.

Funeral service providers who align with financially strong organizations may be better positioned to support sustainable growth, strengthen credibility and adapt to future industry changes.

What should funeral professionals ask preneed companies about financial strength?

When evaluating a preneed provider, funeral professionals should understand:

• How financial strength ratings are determined

• What factors influence those ratings

• How consistently the provider has maintained strong performance over time

Having a basic understanding of these areas can help strengthen conversations with both funeral home teams and the families they serve.

To learn more about Homesteaders’ financial strength, download our most recent annual report of company performance.