Business Wire reported on October 10, 2025, that AM Best revised Fidelity Life Association’s outlook from stable to positive. The Des Plaines, Illinois-based insurer kept its A- (Excellent) Financial Strength Rating.
If you’re a Fidelity Life policyholder or considering buying life insurance, here’s what this upgrade actually means for your coverage, the company’s financial health, and whether you should care about rating changes at all.
We’ll break down what AM Best ratings measure, why a positive outlook matters more than most people realize, and what this tells us about Fidelity Life’s ability to pay claims decades from now.
What Does AM Best’s Positive Outlook Mean for Fidelity Life?
AM Best changed Fidelity Life Association’s outlook from “stable” to “positive” while confirming the company’s A- rating stays the same. Think of the outlook as a weather forecast for the insurer’s future rating.
A positive outlook signals that AM Best expects the company’s financial strength to improve over the next 12-24 months. It’s not a guarantee of a rating upgrade, but it suggests AM Best sees favorable trends that could push Fidelity Life from A- to A in the near future.
The A- rating itself sits in AM Best’s “Excellent” category—the third-highest tier out of 16 possible grades. That means Fidelity Life has strong capacity to meet its ongoing insurance obligations, including paying death benefits and maintaining policy values.
According to AM Best’s rating methodology, a positive outlook indicates the insurer has demonstrated improving risk management, stronger capital levels, or more favorable operating conditions. For Fidelity Life, this reflects recent improvements in both business profile and financial metrics.
Who Owns Fidelity Life Association and Why That Matters
Fidelity Life Association operates as a wholly owned subsidiary of Vericity, Inc., which itself is owned by iA Financial Corporation Inc., a major Canadian financial services company.
This ownership structure actually strengthens Fidelity Life’s position. Here’s why:
- Capital backing: iA Financial Corporation provides financial resources and stability that smaller independent insurers lack
- Risk diversification: Being part of a larger organization spreads risk across multiple companies and geographic markets
- Operational support: Shared technology, compliance systems, and investment expertise reduce overhead costs
- Strategic stability: Less vulnerable to market disruptions that could force independent insurers to cut benefits or raise premiums
When rating agencies like AM Best evaluate insurers, they consider both the individual company’s finances and the strength of its parent organization. Fidelity Life benefits from iA Financial’s solid track record and resources.
How Insurance Credit Ratings Actually Work
Most people buy life insurance and never think about ratings. That’s a mistake. Your insurer’s financial strength rating directly affects whether your policy will pay out 20, 30, or 40 years from now.
AM Best uses a 16-tier scale ranging from A++ (Superior) down to D (Poor). Here’s where Fidelity Life’s A- rating fits:
| Rating | Category | Meaning |
|---|---|---|
| A++, A+ | Superior | Exceptional ability to meet obligations |
| A, A- | Excellent | Strong capacity to meet obligations (Fidelity Life is here) |
| B++, B+ | Good | Adequate capacity but more vulnerable to changes |
| B, B- | Fair | Marginal capacity, requires monitoring |
The rating considers multiple factors:
- Balance sheet strength: How much capital the insurer holds versus its liabilities
- Operating performance: Profitability, underwriting discipline, and expense management
- Business profile: Market position, product mix, and distribution channels
- Enterprise risk management: Systems for identifying and controlling risks
A positive outlook means AM Best sees improvement in one or more of these areas. For Fidelity Life, the ratings agency specifically cited enhanced business profile and financial metrics.
What This Means for Current Fidelity Life Policyholders
If you already own a Fidelity Life policy, this rating change is good news. It doesn’t affect your current premiums or death benefit—those are locked in by contract. But it does matter for long-term security.
Life insurance is fundamentally a promise to pay decades in the future. When you buy a $500,000 policy at age 35, you’re betting the insurer will still be around and financially strong when you die at 75 or 85. Rating upgrades signal that bet is getting safer.
Specifically, the positive outlook suggests:
- Lower risk of policy lapses: Financially stronger insurers are less likely to stop writing new policies or exit markets, which can complicate service for existing policyholders
- Better dividend potential: If you own participating whole life policies, improved financial performance could lead to higher dividend payments (though this isn’t guaranteed)
- Stable policy servicing: Companies with improving ratings invest more in customer service infrastructure and technology
- Reduced conversion risk: If the insurer were struggling, you might face difficulties converting term policies or exercising policy options
You don’t need to take any action. Your policy remains in force exactly as written. But if you were considering adding coverage or converting a term policy, the positive outlook reinforces that Fidelity Life remains a solid choice.
Should You Buy Life Insurance from an A- Rated Company?
Here’s where it gets practical. If you’re shopping for life insurance and comparing Fidelity Life to competitors, is an A- rating good enough?
For most consumers, yes. An A- rating falls comfortably in the “Excellent” category. According to the National Association of Insurance Commissioners, insurers rated A- or higher have historically paid 99%+ of claims without issues.
That said, some buyers prefer the extra margin of safety that comes with A+ or A++ ratings. Consider your priorities:
| Priority | Best Rating Range | Rationale |
|---|---|---|
| Maximum safety (large policies) | A++ to A+ | Worth paying slightly higher premiums for top-tier security on $1M+ policies |
| Balance of safety and cost | A to A- | Strong financial strength with competitive pricing (most buyers) |
| Budget-focused | B++ to A- | Acceptable for term insurance or smaller policies under $250,000 |
Fidelity Life’s A- rating with positive outlook actually puts it in a sweet spot. You get “Excellent” financial strength at potentially more competitive premiums than A+ or A++ rated competitors.
The positive outlook adds confidence that the company is moving in the right direction. If AM Best follows through with an upgrade to A within the next year or two, you’ll have locked in pricing at the A- level while getting A-level security.
How Fidelity Life Compares to Other Insurers Right Now
Context matters. Let’s look at where Fidelity Life stands relative to competitors in the U.S. life insurance market as of October 2025.
According to S&P Global Market Intelligence, approximately 35% of U.S. life insurers carry ratings of A- or higher from AM Best. That places Fidelity Life in the top third of the industry by financial strength.
Here’s how Fidelity Life’s rating stacks up against some well-known competitors:
| Company | AM Best Rating | Outlook |
|---|---|---|
| Northwestern Mutual | A++ | Stable |
| New York Life | A++ | Stable |
| MassMutual | A++ | Stable |
| Prudential | A+ | Stable |
| Fidelity Life Association | A- | Positive |
Notice that while Fidelity Life isn’t at the absolute top tier, it’s the only company shown with a positive outlook. That forward momentum matters. A stable A++ rating is excellent, but it means the company has nowhere to go but down. A positive A- suggests upward trajectory.
For buyers, this creates an interesting opportunity. If you’re comfortable with “Excellent” versus “Superior” financial strength, you might find better pricing at Fidelity Life while the company builds toward that next rating tier.
The Bigger Picture: What’s Driving Life Insurer Ratings in 2025
Fidelity Life’s positive outlook doesn’t exist in a vacuum. Several industry trends are influencing life insurer financial strength right now.
First, interest rates have stabilized after years of volatility. Life insurers invest premium dollars primarily in bonds. Higher interest rates that persisted through 2024 and into 2025 have improved investment income, strengthening balance sheets across the industry.
Second, mortality experience has normalized post-pandemic. Between 2020 and 2022, many insurers paid out more death claims than expected. By 2025, claim patterns have returned to pre-pandemic levels, improving profitability.
Third, technology investments are paying off. Insurers that modernized underwriting, claims processing, and customer service are seeing lower operating expenses. According to the Insurance Information Institute, insurers that digitized operations reduced administrative costs by an average of 15-20% between 2020 and 2025.
Fidelity Life’s positive outlook likely reflects its ability to capitalize on these trends. Improved risk management mentioned in AM Best’s revision probably includes better data analytics, more efficient operations, and stronger investment performance.
Frequently Asked Questions
What does AM Best’s positive outlook mean for Fidelity Life policyholders?
A positive outlook means AM Best expects Fidelity Life’s financial strength to improve over the next 12-24 months, potentially leading to a rating upgrade from A- to A. For policyholders, this signals greater confidence in the insurer’s ability to pay claims decades from now. Your current premiums and benefits don’t change, but the company’s long-term security is strengthening. It’s like getting a promotion forecast at work—nothing changes today, but the trajectory is promising.
Is an A- rating from AM Best good enough for life insurance?
Yes, an A- rating falls in AM Best’s “Excellent” category, indicating strong capacity to meet insurance obligations. For most consumers buying policies under $1 million, this rating provides sufficient security. Insurers rated A- or higher historically pay 99%+ of claims without issues. If you’re purchasing very large policies (over $2 million), you might prefer A+ or A++ rated insurers for extra margin of safety. But for typical coverage amounts, A- is solid, especially with a positive outlook suggesting improvement.
Who owns Fidelity Life Association?
Fidelity Life Association is a wholly owned subsidiary of Vericity, Inc., which in turn is owned by iA Financial Corporation Inc., a major Canadian financial services company. This ownership structure provides Fidelity Life with capital backing, risk diversification, and operational support that strengthen its financial position. The parent company’s resources and stability contributed to AM Best’s positive outlook revision.
How often does AM Best change insurance company outlooks?
AM Best reviews insurer ratings continuously but typically publishes formal outlook changes only when material circumstances shift. A revision from stable to positive is relatively uncommon—most insurers maintain stable outlooks for years. According to AM Best’s historical data, only about 10-15% of rated insurers carry positive or negative outlooks at any given time, with the remaining 85-90% rated stable. When AM Best changes an outlook, it signals meaningful improvement or deterioration in the company’s fundamentals.
Should I switch to Fidelity Life because of the positive outlook?
Not necessarily. Switching life insurance policies typically involves new underwriting, potential health issues affecting eligibility, and loss of time-in-force benefits. The positive outlook makes Fidelity Life worth considering if you’re shopping for new coverage, but don’t cancel existing policies solely based on a competitor’s rating change. If you already have coverage from an A- rated or higher insurer, you’re fine. If you’re uninsured or underinsured, Fidelity Life’s positive outlook adds confidence to considering them as an option, but compare rates and features across multiple A- or higher rated carriers.
Check Your Insurer’s Rating Before Making Decisions
If you own life insurance or plan to buy coverage, verify your insurer’s current AM Best rating on the AM Best website. Ratings change, and what was true when you bought your policy five years ago might not reflect today’s reality.
For Fidelity Life policyholders, this positive outlook reinforces that your coverage is backed by an insurer moving in the right direction. For shoppers, it’s one more data point suggesting Fidelity Life deserves a spot on your comparison list alongside higher-rated competitors.
Don’t make rating the only factor—compare premiums, policy features, and customer service too. But never ignore ratings entirely. Your life insurance is only as good as the company that issues it.