Transamerica Life Insurance Review for 2019

When looking for the most suitable life insurance option, often what people care about the most is cost.

  • Is it affordable?
  • Will I be able to pay my premiums for the length of the term or the rest of my life?
  • Can I find a more affordable option elsewhere?

While affordability is important – it isn’t everything. For example, you may want an insurer that offers unique features, like being able to access your death benefit early if you become terminally or chronically ill — or having control over how your beneficiaries would receive the death benefit (in a lump sum, or as income streams).

I’m describing some of the unique features of Transamerica, an A+ rated financial company and life insurance provider with 19.5 million customers in the U.S.

Transamerica offers a variety of life insurance options, from term to indexed universal, and has some of the most competitive rates on the market.

So, what are the pros and cons of Transamerica’s life insurance policies, and could it tick all the boxes for you? Read on to find out.

Transamerica Overview

transamerica life insurance reviewTransamerica is an A+ rated company that has been around since 1905 but is at the forefront of digital innovation.

In 2016, it won an award for its technical innovation in mapping the customer journey from InformationWeek, which sounds very promising.

If you’re looking for a life insurance provider that offers great term life insurance (regardless of whether or not you smoke, even!), Transamerica could be the company you’re looking for.

The company’s rates for smokers are some of the most competitive on the market – and that’s not something you will find in many other insurers.

Because of the elevated health risk that comes with smoking, finding attractive life insurance rates for smokers is typically a mission.

Transamerica also offers accelerated death benefits for multiple illnesses – something many other companies will only offer to those who have been diagnosed with a terminal illness.

What Life Insurance Options Does Transamerica Offer?

Transamerica has a range of term and permanent life insurance policies, including:

Below you’ll find more information about each type.

Transamerica Term Life Insurance

Transamerica’s term life insurance is an ideal option for someone who is looking for life cover at an affordable cost. By purchasing term life insurance, you’ll protect your family’s future if anything unexpected happens to you – but you also won’t spend a fortune on premiums.

There are two types of term life insurance – Trendsetter® Super Series and Trendsetter® LB. Both of these have quite similar features and are very convenient for millennials because of their affordability and flexibility.

Here’s a quick summary of each policy.

Trendsetter® Super Series

  • Term life insurance policy
  • Provides coverage for 10, 15, 20, 25, or 30 years
  • Convertible policy – you can convert it to permanent life insurance (without a medical exam)
  • Face value – up to $10 million
  • Coverage guaranteed to remain the same
  • Free to cancel your term life insurance at any time

Trendsetter® LB

  • Term life insurance policy
  • Coverage terms: 10, 15, 20, 25, or 30 years
  • Death benefit: up to $2 million
  • Living benefits included: accelerate your death benefit if you become chronically, critically or terminally ill

Universal Life Insurance

Combining elements of term insurance and a whole life policy, universal life insurance by Transamerica is a flexible way to stay insured for life. As long as your premiums are paid, you don’t need to worry – your cover won’t expire.

Universal life insurance offers a guaranteed death benefit which will be paid out to your family in the event of your death, as well as a cash value component. Your cash value grows tax-deferred, so no tax will be paid until you withdraw the accumulated cash.

With Transamerica’s universal life insurance, there’s an additional layer of flexibility – because you can adjust the amount and frequency of your premium payments (as long as the cash value in the policy is enough to cover monthly payments).

Transamerica offers several types of universal life insurance: index universal life insurance, variable universal life insurance, and group universal life insurance.

Transamerica’s Universal Life Insurance:

  • Permanent life insurance
  • Guaranteed death benefit
  • Adjustable premium payments and death benefit
  • Index, variable and group universal policies available

Index Universal Life Insurance

Index universal life insurance is similar to variable universal life insurance. But the main difference is that your cash value can only be invested in two sub-accounts – an indexed or a fixed account.

If you invest in the fixed account, your cash value growth will depend on Transamerica’s performance. It also has a guaranteed 2% interest rate.

However, if you invest in the index account, your cash value growth will be linked to a particular index (for example, the S&P 500). The indexed account has a 0.75% guaranteed interest rate.

Transamerica’s Index Universal Life Insurance:

  • Permanent life insurance
  • Cash value invested in an index or fixed account
  • Fixed account has a guaranteed interest rate of 2%
  • Index account has a guaranteed interest rate of 0.75%

Variable Universal Life Insurance

Another type of permanent life insurance offered by Transamerica is variable universal life insurance. It provides protection for life while putting your money to work.

Your premiums can be invested in professionally managed accounts, exposing them to underlying investments (e.g., stock and bond subaccounts). This means your cash can accumulate over time – but with higher potential returns come higher risks, meaning that if your investments don’t do that well, you could be left with a lower cash value.

Transamerica’s Variable Universal Life Insurance:

  • Permanent life insurance
  • Cash value with higher potential returns
  • You choose the set of sub-accounts to invest in (each subaccount is similar to a mutual fund)
  • The minimum death benefit of $100,000
  • The minimum guaranteed interest rate on cash value
  • Option to use the cash value to pay premiums
  • Additional riders available

Whole Life Insurance

Transamerica’s whole life insurance provides stable protection for life while letting your money accumulate as cash value which you can access when you really need to. This cash value is tax-deferred, and it builds up over time – as long as you pay your premiums.

You can access it as a loan – but it will need to be repaid in full if you don’t want it to reduce your death benefit.

You can purchase two whole life policies from Transamerica:

  • Individual whole life insurance
  • Group whole life insurance

Transamerica’s individual life insurance policy can be purchased, while group whole life insurance can be accessed through your employer as a voluntary benefit.

Here’s a quick summary of each policy:

Individual Whole Life Insurance

  • Permanent life insurance
  • Death benefit amounts available: from $2,000 to $3 million
  • Cash value component which you can access in case of an emergency

Group Whole Life Insurance

  • Permanent life insurance available through your employer
  • Guaranteed whole life insurance coverage
  • Face value up to $25,000

Final Expense Life Insurance

Final expense insurance covers funeral costs, medical bills, death certificates, and other similar expenses.

These can often cost a substantial amount, and knowing your family won’t have to dip into their savings if anything was to happen to you will give you peace of mind.

Similarly to whole life insurance, final expense insurance is permanent – but the main difference is that to purchase whole life insurance, you will need to complete a full medical exam.

Transamerica offers three final expense policies:

  • Immediate solution
  • 10-Pay solution
  • Easy solution

Main features of Transamerica’s final expense life insurance:

  • Coverage available without medical exam (up to $50,000)
  • Fast-track eligible
  • Permanent coverage
  • Offers cash value

Accidental Death Insurance

Transamerica also offers accidental death insurance, which can be purchased as a standalone policy or added as a rider to an existing policy. If death occurs as a result of an accident covered by the policy (such as a traffic accident, for example), your beneficiaries will receive the death benefit.

Transamerica offers two accidental death policies:

  • Plan A: beneficiaries receive a benefit equal to $250,000 (double for common carrier accidents)
  • Plan B: beneficiaries receive a benefit equal to $125,000 (double for common carrier accidents)

Transamerica’s Financial Strength

Transamerica is a financially strong and stable company, so there’s nothing to worry about with regards to the future and the company’s ability to pay claims to your family. A.M. Best has rated Transamerica as “superior” – which is reassuring.

Pros and Cons of Transamerica

Here’s a quick summary of the pros and cons:

Pros of Transamerica:

  • Good term life insurance for smokers
  • A range of insurance types available
  • Offers financial advice and guidance on the website
  • Electronic application
  • Faster than average application approval
  • Living Benefits allows early access to your death benefit
  • Additional riders available, depending on the policy (Child Protection Rider, Disability Waiver of Premium Rider, Accelerated Death Benefit Rider, and Accidental Death Benefit Rider)

Cons of Transamerica:

  • Policy delivered by mail
  • If you want to update your beneficiaries or change payment info – you’ll need to complete paper forms

Is Transamerica Insurance For You?

Knowing which company to go for when it comes to insurance can be confusing – and because there are so many contenders – a little overwhelming. Plenty of companies offer similar services, and it can take forever to review all of their unique features.

But if you’re looking for a financially stable company that offers a wide range of insurance options at competitive prices – Transamerica is worth considering.

If you don’t have a perfect health profile, insurance rates often skyrocket. Transamerica is an excellent option for people with substandard health profiles because their rates remain competitive, even if your health isn’t the best.

Grant Sabatier

Creator of Millennial Money and Author of Financial Freedom (Penguin Random House). Dubbed "The Millennial Millionaire" by CNBC, Grant went from $2.26 to over $1 million in 5 years, reaching financial independence at age 30. Grant has been featured in The New York Times, Wall Street Journal, BBC, NPR, Money Magazine and many others. He uses Personal Capital to manage his money in 10 minutes a month.

Latest posts by Grant Sabatier (see all)

Posted in: Life Insurance

No Comments

Post A Comment