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Why Use a 10 Point Scale? Quality Should Be Easy to See

Written by Aaron Pinkston, Wed, Mar 10 2010

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A real question I am sometimes asked is why Clarifinancial uses a 10 point scale to rank companies on their financial quality. My answer is that a relative rating system is more meaningful to most shoppers than other systems currently in place.

Most life insurance rating companies now give ratings based on an alphabet scale. Many further complicate the scale with capital and lower case letters or pluses or minuses and sometimes numbers. The lack of standardized terms makes comparing financial ratings difficult. What’s more, some rating agencies skew their results towards the top or bottom, so that a “B” from one rating agency might be considered better than an “Aa2”.

I don’t know about you, but that confuses the heck out of me.

To give some clarity to the issue, let’s look at an example from another field….

The current system doesn’t mean very much except to certain professionals in that field. As an outsider, the idea the rating system is suppose to convey is much clearer when ratings are relative. We can all relate to a 10 point scale. I know that an earthquake of 6 is much worse than a 3, even though I’ve never been in an earthquake before. I know that the 7 on my cook top is much hotter than a 3, even though I don’t have absolute temperatures assigned to these numbers.

In the spoof comedy, Spinal Tap (video), they even made a joke about the prevelance of the 10 point scale. They suggested their amps are better because they go up to 11.

There are examples from every day life:

It’s just a handy guide. And that’s what the 10 point life insurance quality scale does. Instead of offering absolute values and rankings of all the various institutions, it’s more useful to know their relative strength. This way, if two quotes you receive are close in price and other variables but one has a “7” while the other is a “9”, your decision could be a lot easier.

By removing yet another mystery from insurance shopping, your choices become clear. That’s one way Clarifinancial makes choosing easy. Try it today.