If you get a quote for cheap life insurance from a company you don't recognize, would you buy it? While some may feel safer in the good hands of major insurance brands, the truth is that all life insurance companies are regulated. Products from small companies are often just as sound as those offered by the big guys.

What's in a name?

There are plenty of life insurance companies from which to choose, and many are not going to be instantly recognizable. For instance, nearly 140 companies write life insurance policies in New York, generating $188 billion in annual premiums, according to The New York Department of Insurance. There is a good chance you may not have heard of many of them, but that doesn't mean you should automatically overlook their life insurance quotes.

Some "no-name companies" are actually subsidiaries of larger financial firms. ReliaStar is a good example. More than 115 years old, ReliaStar first formed as the Northwestern National Life Insurance Company in 1885. As it grew and expanded, it acquired other life insurance companies and eventually rebranded itself as ReliaStar in 1995. Today, the company is a subsidiary of global financial services company ING Groep N.V.

State regulation of life insurance companies

Another reason a company's name may not matter is the fact that insurance is a highly regulated industry. Each state maintains an insurance commission or insurance department, which oversees companies doing business in their state. Regulations vary, but all have the goal of ensuring that insurance companies meet obligations.

Should a life insurance company begin to falter, the state will step in and take over by facilitating the sale of active policies to a healthy insurer or liquidation of the company. In those instances, policyholders are often protected from individual losses through life and health insurance guaranty associations. Just as the FDIC provides government insurance for certain deposits in U.S. banks, state life and health insurance guaranty associations do the same for insurance products. Guaranteed benefit limits can depend on the state but most states cap the amount that can be recovered from individual life insurance policies at $300,000.

Life insurance ratings matter

More important than your life insurance company's name is its financial strength. After all, you want the company to be in business to pay your claim when the time comes. Even though the government provides some protection in the case of insolvency, it pays to check the firm's financial strength before making a life insurance purchase. Several independent firms rate life insurance companies. Some provide rating information for free while others charge a fee.

Here are three well-known life insurance ratings firms:

  1. A.M. Best
  2. Standard & Poor's
  3. Moody's Investor Services

When considering an insurance company, check for complaints, according to non-profit consumer education foundation LifeHappens.org. The National Association of Insurance Commissioners (NAIC) maintains a complaint and financial information database for consumers interested in researching life insurance companies.

Find the right insurance company

Purchasing life insurance is a major investment, and it is wise to carefully consider your options. Don't write off good life insurance quotes just because they come from businesses you don't immediately recognize. Do your homework, and you may find that the "no-name" life insurance company you are considering offers service and products that match up well against products and services offered by better-known brands.