Transamerica Life Insurance Review

Transamerica has established itself as one of the premier companies in the US when it comes to life insurance and retirement products. They offer both individual and group benefit plans. Their strong financial ratings are proof of their experience and expertise from more than 100 years of being in operation.

In this review, we’ll cover some of the most critical aspects that you need to know to help you determine if Transamerica is the right life insurance company for your needs. We’ll take a look at the company’s history, their financial strength, the products they offer, and overall pros and cons. Lastly, we’ll reveal our recommendation if Transamerica is a good option for your life insurance needs.

History of Transamerica Life Insurance

In 1904, Amadeo P. Giannini established the Bank of Italy in San Francisco which would become Bank of America in the next twenty-four years. He created a holdings company and named it Transamerica.

Within two years he acquired Occidental Life Insurance Company and renamed it Transamerica Occidental Life Insurance Company. The company would later become a conglomerate of companies which include Transamerica Airlines, Budget Rent A Car, and United Artists.

In the ’80s, the company focused its efforts on financial services, which was composed of insurance, retirement, and investments. Two decades later, Transamerica acquired an insurance company from the Netherlands called Aegon.

On October of 2008, their insurance services business adopted Transamerica Life Insurance Company as its new name. Today, the company offers individual and group life insurance and retirement products.

Transamerica Financial Strength

Transamerica boasts strong financial ratings from the most respected agencies in the US. Excellent scores reflect a company’s ability to pay beneficiaries and overall performance as a financial services provider.

A.M. Best = A+

Fitch = A+

Moody’s = A1

S&P Global = AA-

Transamerica Life Insurance Products

The company currently has four life insurance products in their line-up. They have term, whole, universal, and final expense life insurance. They also offer supplemental coverage for out-of-pocket healthcare costs and unexpected expenses for nursing home and home health care.

Transamerica Term Life Insurance

Term life is the best option for people who want protection during the most important financial years of their lives. For example, paying for your child’s education or the mortgage on your house. Term life is a popular choice because of its affordability and simplicity.

Transamerica’s term life policy is offered in increments of 5 years, starting at 10-years up to 30 years. Coverage begins at $25,000 and can go for as much as $10,000,000. They use traditional underwriting procedures, which means most applicants will be required to take a medical exam, unlike newer life insurance companies like Haven or Banner Life.

The death benefit package can be paid in a lump sum or spread out between a period of 5-10 years. It’s a great feature that can help ensure the benefit doesn’t get used up too quickly.

Transamerica offers two types of term insurance policies:

Trendsetter Super Series

The coverage amount you select is guaranteed to remain fixed throughout the term period. You can opt to convert it to whole life later once the initial policy expires. Policy amount maxes at 10 million or higher depending on the assessment and consideration for the policyholder.

Trendsetter LB

The main advantage this one has over the Super Series policy is its living benefits. A policyholder can access a portion of his benefit (via accelerated death benefit rider) if he or she qualifies for a terminal, critical, or chronic illness. Coverage maxes at $2 million.

Transamerica Term Policy Riders

Waiver of premium

A policyholder’s premium will be waived if they become completely disabled (subject to qualification) for more than six months.

Return of premium

If you have a 20 or 30-year term policy and live past it, you can receive back a portion of your premiums.

Transamerica Life Insurance Review

Whole Life Guaranteed Insurability

You can convert your term life policy into whole life at specific periods of the coverage. You won’t need to prove insurability nor take another medical exam.

Estate Protection Rider

This gives you additional coverage for paying estate taxes if your death benefit gets taxed with it.

Additional Insured and Child Riders

Let’s policyholders add extra coverage for the kids and spouse.

Decreasing coverage

The death benefit of your policy will decrease at predetermined rates and time. The idea is that you likely would have paid off some or most of the main expenses as you near the end of the policy and wouldn’t need the same total death benefit.

As you reach the end of the initial term and decide to renew it, note that the new policy will renew on an annual basis. With that setup, your premiums are most likely to increase every year.

There’s an option for a no-medical exam requirement policy provided that the death benefit is less than $250,000 for Trendsetter LB and $100,000 for Trendsetter Super Series.

For Trendsetter LB, the following categories of illnesses qualify the policyholder for the accelerated death benefit (living benefits) feature.

Critical Illness

Heart attack, cancer, stroke, blindness, or ALS are medical conditions that can have a severe impact on the policyholder’s way of living.

Chronic Illness

Applies when the policyholder has an illness that prevents them from performing two of the primary activities of living like getting dressed, taking a bath, walking, using the toilet, eating, and control of bowels and bladder. Also, any condition that requires the person to be supervised at all times to avoid injury and other risks is considered a chronic illness.

Terminal Illness

If the policyholder was assessed only to have less than 12 months to live, it is considered a terminal case.

When the accelerated death benefit feature is activated,  the policyholder can receive up to 24% of the benefit on an annual basis or use up to 90% over the lifetime (tops at $1.5 million)

As for the Trendsetter Super Series, policyholders can add accelerated death benefit as a rider if the policy is more than $50,000. However, it will only apply for terminal illnesses and maxes out at 75% of the death benefit or $250,000, whichever is lower. Don’t forget to check the Transamerica website for a list of states where this feature doesn’t apply.

Transamerica Whole Life Insurance

Whole life insurance, also called straight life insurance, is a policy that provides a lifetime of protection as long as you pay the premiums on time. It also features offers cash value that accumulates and can be borrowed against by the account holder.

Transamerica offers two types of whole life policies on its site for individuals and group. Their individual whole life insurance is available with face amounts starting at $2,000 up to $2 million. Like with other typical whole life offerings, the premiums are level and the death benefit value is guaranteed.

Transamerica Universal Life Insurance

Universal life insurance is similar to whole life but has the advantage of flexibility in paying the premiums. It has the same guaranteed death benefit and cash value, but you can choose from a couple of ways on how to pay your premiums.

For example, some people may want to pay higher premiums during their high-earning years then decrease payments as they near retirement. However, while you can adjust the amounts based on your preference, there’s typically a minimum premium payment set by the company that you have to pay.

Transamerica currently offers Index Universal Life Insurance (IUL) to potential customers. To the unfamiliar, it’s a type of universal life insurance wherein returns are linked to a stock index, like the NASDAQ 100 or S&P 500. Its performance will be the main factor that will be used to determine what your rate of interest will be in the IUL.

Transamerica Final Expense Life Insurance

Final expense life insurance is a policy that will help ease the financial burden of expenses like burial and funeral services. In the US, the average price of a funeral ranges from $8,000 to $10,000.

This amount is substantial and might cause additional stress for the people you leave behind. A final expense life insurance policy allows you to pay these costs out of your pocket so they won’t have to.

Transamerica offers three variants of its final expense insurance:

Immediate Solution

Your premiums are fixed. Anyone between 0 to 85 can sign up. Coverage starts at $1,000 and tops out at $50,000. Benefits will vary based on the age group where the policyholder belongs. For example, if you are 55 or below, the max payout is $50,000 while policyholders between 76 and 85 years can only receive up to $250,00.

10-Pay Solution

Guarantees that your premiums will remain fixed for ten years. Same with Immediate Solution, coverage starts at $1,000 and maxes at $5,000 and the amount they can sign up for will vary with their age.

Easy Solution

The benefit will depend on the face amount of the accidental death benefit of the policyholder or 110% of the total premiums paid (loan balance will be deducted if there is one). After the first two years, the death benefit will be based on the face amount regardless of the cause of death.

You can pay for all Transamerica life insurance products via the following methods: Check, bank draft, or credit card. The company accepts Visa, MasterCard, American Express, and Discover credit card payments. You can also set automatic payment options to monthly, quarterly, semi-annual, or annual basis.

Transamerica Life Insurance Pros and Cons

Pros

  • Strong financial ratings
  • Competitive premium rates for their term life insurance
  • Decent selection of riders to choose from
  • Final Expense Insurance is offered in 3 options

Cons

  • Their Universal Life insurance has been subject to controversy in the past
  • Customer service rated only as “About Average” per JD Power 2017 report
  • The website doesn’t provide much information about their products

Transamerica Life Insurance: Is it for You?

Transamerica’s main strengths lie in their term life insurance offerings. They offer a wide benefit range ($25,000 up to $10 million) which provides enough flexibility for customers to tailor it to their needs and payment capability.

Another term insurance advantage that Transamerica offers are the options on how you can utilize the benefits.  Their Trendsetter LB term insurance, for example, has a “living benefits” feature that allows the policyholder to receive up to 24 percent of the benefit each year provided they qualify for specific illnesses or conditions.

Alternatively, they can opt to use up to 90 percent of the total benefit spread across the policyholder’s lifetime. Combined with other useful riders, customers can come up with flexible and sufficient term insurance coverage that won’t break the bank.

Where the company falls short is on their universal life offerings. They only offer Index-type, and the controversy that surrounded their previous universal life insurance policies may affect the views of customers negatively.

The company was ordered to pay $195 million for the alleged improper increase in monthly charges on over 70,000 accounts. As for their whole life and final expense offerings, they are decent and comparable to other insurers but nothing genuinely remarkable that gives it a leg up with the competition.

Checkout Transamerica if you are looking for a company that has strong financial ratings with competitive term life insurance offerings. However, if you’re looking for something else, you might find better deals out there.

Getting life insurance isn’t rocket science. However, it isn’t as simple as choosing whichever policy is the most popular or easy to get. Remember, each person has different needs. The best way is to shop around, get quotes, compare prices. If you have questions or want to talk to a life insurance expert, our dedicated agents will be happy to assist.