The Credit Rating of an Insurance Company Is Important to a Purchaser

question 17

True/False

The credit rating of an insurance company is important to a purchaser of insurance, especially for the types of insurance that may be paid well into the future, such as health insurance.

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Definitions:

Cost of Borrowing

The total charges, including interest and any other fees, that a borrower pays to secure and use borrowed money.

Acid-Test Ratio

A financial metric that measures a company's ability to meet its short-term obligations with its most liquid assets.

Working Capital

Current assets less current liabilities.

Current Ratio

A financial metric that measures a company's ability to pay off its short-term liabilities with its short-term assets.