Insurance is a gamble. For the insurance company it is a gamble on whether enough can be collected from a client to cover the costs of a claim and for the customer it is a gamble whether the investment into insurance will actually deliver on a claim once it has been filed. Even the largest insurance companies can fall when the stock markets turn bad or natural disasters strike a wide region. But there are safeguards that you can take to make sure you've picked a company that can stand the test of time.
There are industry analysis companies which keep tabs on which insurance companies have the most stable financial foundations. Two of the best known companies of this type are A.M. Best and Standard & Poor. These companies look at an insurance company's assets, outflows, and rates the company by how well they could be expected to handle even serious expenditures in short-term and long-term claim filings. This analysis includes watching the portfolios of insurance companies and adjusting their rating when the stock market causes company value to decline sharply. Knowing how well your insurance company is rated by a company such as A.M. Best could save you from purchasing a life insurance policy that is worthless 20 years down the road.
Do not assume that insurance is a waste of money because your policy value could drop unexpectedly. When considered against the loss if you do not have insurance, taking a chance on falling value is worth the risk. Just as insurance companies are gambling on being able to collect enough revenue to cover the outflow, your family is gambling on you to take steps that reduce the loss when disaster strikes. Even if the policy fails, the loss will be less than what it would cost you to cover repairs out of pocket. Your responsibility will be to choose your insurance policies so that you associate with companies less likely to suffer economic loss.