Transamerica Life Insurance Review: Are They Legit?
Article HighlightsAbout The Company The Highlights Term Life Insurance Whole Life Insurance Final Expense Insurance Universal Life Insurance Accidental Death Insurance Other Life Insurance Companies Should You Choose Transamerica?
Transamerica has consistently been placed in the elite top ten life insurance providers in the US.
They offers traditional life insurance products such as term life, whole life, and universal life policies but they also have a few unique aspects including a guaranteed policy.
However they are not the perfect fit for everyone though….
In this guide, I will review in depth all their policies, so you can decide whether they’re a good fit for you.
About The Company
Transamerica has been around since 1904, providing a variety of financial services to consumers including term and whole life insurance.
They are one of the top 10 life insurance companies in the United States and have an A- rating with the Better Business Bureau.
- Transamerica is an established & well-rated company offering many life insurance policies
- They offer term, whole life, universal life, and final expense insurance policies
- You must go through an agent for most policies, except term life insurance
- They also offer a variety of attractive riders
- Large selection of insurance products
- No medical exam on the final expense policy for any age
- They are a longstanding company with a strong financial backing
- They offer an interactive tool to help you choose the right policy
- You must talk to an agent to get a quote in most cases
- The customer service ratings are less than optimal
- They don’t offer child life insurance policies
Term Life Insurance
Term life insurance is a temporary policy that you buy for a specific period, say 15 or 30 years.
Transamerica offers policies from $25,000 to $10 million and most policies require a medical exam. You can purchase policies in increments of 5 years starting at 10 years.
Think about what you’re covering (a mortgage, college expenses, etc.) and then choose the policy that works best for you. Transamerica offers 2 term life policies:
Trendsetter Super Series
You may apply for coverage up to $10 million for a term of up to 30 years.
Upon expiration, you can convert the policy to a permanent life insurance policy without medical exams or more underwriting.
You may apply for coverage up to $2 million and you can draw on your benefits while you’re alive if you receive a chronic, terminal, or critical illness diagnosis, this is called living benefits.
Transamerica also offers applicants conditional temporary coverage. If you have at least a standard rating, you may receive the following coverages:
- 16 – 65-year-olds can get up to $1,000,000
- 66 – 75-year-olds can get up to $400,000
- 76 or older can get up to $100,000
Transamerica offers several riders to enhance your coverage:
Add protection for your children from 15 days old to 18 years old. The protection is available from $1,000 to $99,000 in $1,000 increments.
This replaces an individual life insurance policy on your children and usually costs less since it’s a rider on your existing policy.
Accident indemnity rider
If your death is an accident, your beneficiaries will receive a higher payout. If the accident is due to a common carrier bus, plane, or train accident, they’ll receive double your policy’s face value.
The rider also pays the insured if the accident causes loss of limbs or eyesight.
Monthly disability income rider
If you are rendered disabled for more than 3 months, this rider will pay you up to $2,000 a month for up to 24 months.
This is only available on the Trendsetter LB policy and only if you’ve been disabled for 90 days or more.
Accelerated death rider
If you’re diagnosed with a terminal illness and you have less than 12 months to live, you pay 75% (up to $250 000) less than your policy’s value.
Waiver of premium rider
If you become totally disabled for six months or more, this rider waives your premiums but keeps your policy intact.
Transamerica offers competitive rates for its term life insurance policies. Here’s an example for a healthy male:
Male term life insurance for a 10-year term:
- $100,000 coverage – 20-years old $13.24 a month, 40-years old $13.33 a month, and 60-years old $42.66 a month
- $500,000 coverage – 20-years old $24.51 a month, 40-years old $23.22 a month, and 60-years old $131.58 a month
Female term life insurance for a 10-year term:
- $100,000 coverage – 20-years old $11.95 a month, 40-years old $12.47 a month, and 60-years old $36.98 a month
- $500,000 coverage – 20-years old $12.90 a month, 40-years old $19.78 a month, and 60-years old $112.23 a month
Both policies are eligible for conversion until you turn 70 unless you have a Preferred Plus classification – then you have up until age 75 to convert your policy.
Whole Life Insurance
How it works
Whole life insurance lasts for your ‘entire life’ as long as you pay the premiums. It doesn’t expire and it accrues a guaranteed cash value, which you can use throughout your lifetime.
The premiums are much higher, but the coverage is long-term and has more benefits, especially if you don’t have retirement savings.
Many people use this in addition to their retirement savings, especially if they’ve maxed out their allowed retirement contributions.
You may apply for coverage between $25,000 and $2 million and apply between the ages of 20 and 80 years old.
Transamerica has policies/premium rates for many classifications based on your health and has level premiums throughout the policy. The older you are when you apply, the higher the premiums.
A portion of your premium covers your death benefit and the administrative costs. The other portion accumulates a cash value at a guaranteed rate.
The balance builds throughout the life of your policy. You may access the cash as a loan while you’re alive. If you don’t repay the loan, it reduces your death benefit dollar-for-dollar.
The loans and withdrawals are tax-free.
Accelerated death benefit
If you receive a terminal, chronic, or critical illness diagnosis, you may access a portion of your life insurance policy to cover your expenses.
This reduces your death benefit amount but helps you cover the high expenses you incur while alive.
Automatic premium payment
If you miss a premium payment (after the 31 day grace period) Transamerica can automatically deduct it from your cash value.
Coverage continuation option
After you have the policy for 8 years, you may convert it to a universal life insurance policy without a medical exam or underwriting. This gives you more protection without the hassle of underwriting.
Premium loan provision
You may request in writing that your cash value cover your premiums for a predetermined time or until you request it to end. All requests must be in writing.
Final Expense Insurance
Final expenses insurance, as the name suggests, covers your final expenses. This may include funeral and burial costs, final medical bills, or even any bills/liabilities you leave behind.
Transamerica offers final expense insurance up to $50,000.
How it works
Final expense insurance doesn’t require a medical exam. You just answer a few basic medical questions and coverage is available right away – no waiting period.
Transamerica has three final expense insurance options:
- Immediate solution – Available for ages 0 to 85. You pay level premiums up to age 121
- 10-day solution – Available for ages 0 to 85, but you pay premiums over 10 years
- Easy solution – Available for ages 18 – 80 with premiums paid for your entire life
The maximum amount of coverage varies based on the type of final expense insurance you choose.
Offers coverage up to $25,000
Immediate and 10-day options have limits based on age:
- Up to age 55 – $50,000
- Between the ages of 56 and 65 – $40,000
- Between the ages of 66 and 75 – $30,000
- Between the ages of 76 and 85 – $20,000
Universal Life Insurance
Universal life is another permanent life insurance policy, but with more flexibility. You pay premiums to cover your death benefit, plus fund your cash value.
The cash value is tied to an index, which means the value may rise or fall. However, you have flexibility when paying your premiums.
As long as you cover the death benefit amount, you can vary the premium amount you pay each month.
Transamerica offers two universal life insurance policies:
Index Universal Life
You may split up your premium payments between an interest account and two indexed accounts. The indexed accounts are dependent on the stock market index and have more risk.
Financial Foundation IUL
This policy has a guaranteed interest rate. You may access your cash value via a loan or withdrawals, both of which are tax-free.
As long as you pay the minimum premium (the no lapse amount), the policy won’t lapse. But making minimum premium payments means no accumulated cash value.
- The cash value has a guaranteed interest rate, aka floor so you know the minimum you’ll accumulate
- There’s a no-lapse guarantee
- You may borrow against the cash value tax-free
- You have the potential for higher earnings with the stock market indices
Accidental Death Insurance
Transamerica also offers accidental death insurance. You shouldn’t rely on it though because it’s not a true life insurance policy. It only pays out if your death is an accident.
However, it’s a great supplement if you worry about an accident, whether due to your occupation or your hobbies. It’s available in two coverage amounts – $250,000 and $125,000.
If your death is a result of a common carrier accident, such as a bus, train, or plane, the coverage amount doubles.
Other Life Insurance Companies
New York Life Insurance
New York Life is an established and well-known life insurance company. They offer more flexible term life insurance options.
These include a yearly convertible option that gives you a longer window to convert to a permanent life insurance policy as well as a level convertible policy which gives you 10 to 20 years to convert.
New York Life has lower premiums than Transamerica, especially on its Value Whole Life insurance policy. If you’re considering permanent life insurance, look closely at New York Life.
Mutual Of Omaha
Mutual of Omaha is another established life insurance company that has been around for more than 100 years. If you have less than perfect health, it’s worth a look.
They offer competitive rates and a variety of policies that may suit your needs more than Transamerica.
In particular, they offer a guaranteed life and simplified life policy, both of which have much more flexible underwriting guidelines for those who have health issues.
AIG Life Insurance
AIG is a great life insurance company for those looking for a custom policy. Their term life insurance alone has 18 options – much more than any other life insurance policy offers.
You can ‘ladder’ your life insurance by buying policies for particular events, such as paying off your mortgage or paying for college. You may also convert policies throughout the term.
AIG offers guaranteed whole life and universal life insurance policies – each of which you can customize. They are definitely worth a look if you have special circumstances and/or health issues.
Gerber Life Insurance
Gerber Life is known for its life insurance for children, called the Grow-Up Plan.
This is a unique offering that’s great for parents who want to set their children up for financial freedom in their adulthood.
They also offer traditional life insurance policies for parents including term, whole life, guaranteed issue, and accidental life insurance.
If you want a policy for your children, Gerber is a great place to get policies for everyone, keeping it all in one place.
Should You Choose Transamerica?
Choosing the right life insurance policy is a personal decision. I recommend that you look at a few different companies, as each company has specialties, not to mention different premiums.
See what options are available to you and compare them to your financial needs.
Whether you need term life insurance to cover a temporary issue or something long term that lasts your entire life, Transamerica along with many other life insurance companies have great options.