Choosing health insurance can be confusing because of the dynamics within the health care marketplace. That is why it is important to find a policy backed by a reputable insurance company that provides quality coverage for you, your family, or your employees. It is best to consider a health insurance company with whom you are comfortable.

Purchasing a health insurance plan or policy mean you are buying an insurer's promise. This promise is essentially a contract between you and the insurer to make the payments specified in the policy if you incur covered medical expenses.

In order to fulfill its contractual obligation, the insurance company must be able and willing to pay the claim. Financial stability is a good measure of an insurance company's ability to pay the claim.

The financial stability of an insurance company is a very telling indicator of its ability to pay future claims. A.M. Best Company, Moody's Investor Service, Duff & Phelps, and Standard & Poor's are a number of financial publishing firms that investigate and report their findings on the financial standing of specific insurance companies. These reports can be expensive. However, they are often available in the reference sections of business, public libraries, and the firm's own website. Ask your agent for information or call or write the company's home office and ask for a copy of its most recent annual report or a report from a rating firm.

A good source of information is your state insurance department, because they regulate insurers and collect information about the number of complaints received about a particular insurance company. Local consumer groups, newspaper columnists, and Better Business Bureaus may have additional information.

It is important to find out if the company and agent are licensed to do business in your state. Your state insurance department is the source for this information. It requires the companies it licenses to file yearly financial reports, maintain legally required reserve funds, undergo periodic inspection audits, and comply with state laws regarding fairness.