Transamerica Life Insurance: Is The Company Still Operational?

Transamerica is a life insurance company that offers a range of policy types, including term, index universal, whole life, and final expense life insurance. The company has been in business for over 100 years and is licensed to sell policies in all 50 states and Washington, D.C., although some policies are not available in New York. Transamerica has received positive reviews for its reliable policy illustrations and top-notch benefits, but has also faced frequent customer complaints and poor customer satisfaction scores. The company's financial strength has been rated as excellent by AM Best, but its customer satisfaction scores from J.D. Power and NAIC complaint ratings are lower than average.

Transamerica's life insurance policy types

Transamerica offers five different life insurance policy types. The company is licensed to sell policies in Washington, D.C., and all U.S. states, but some policies are not available in New York.

Term Life Insurance

Term life insurance provides coverage for a specified period, typically 10, 15, 20, or 30 years. It pays a federal income tax-free death benefit to the beneficiaries if the insured dies during the specified time period. Term life insurance is generally less expensive than permanent life insurance, making it a good option for those on a tight budget. Many term life products also offer a conversion provision, allowing the policy owner to convert their term life insurance policy into a permanent life insurance policy. After the initial term, many policies can also be renewed, but at higher annual premium rates. Term life insurance does not carry a cash value, so it does not accumulate cash value over time.

Transamerica offers two term life insurance policies: Trendsetter Super and Trendsetter LB. Both policies offer term periods of 10, 15, 20, 25, or 30 years, with coverage ranging from $25,000 to $10 million and up. No medical exam is required for up to $2 million in coverage for qualifying applicants. These policies are flexible and can be converted to permanent life policies during the conversion period. They also provide accelerated death benefits for qualifying terminal illnesses.

Permanent Life Insurance

Permanent life insurance provides coverage for your entire lifetime and includes a cash value component in addition to the death benefit. Certain permanent life insurance products offer flexible premium payments, allowing you to increase, decrease, or even skip payments if the policy value is sufficient. Permanent life insurance contracts also offer tax advantages, as they meet specific IRS requirements for favourable tax treatment. The cash value component of permanent life insurance products grows tax-deferred, and taxes are not paid on any gains until they are withdrawn.

Whole Life Insurance

Transamerica's whole life insurance, branded as Transamerica Lifetime, offers robust customization through various rider options. Key guarantees include a guaranteed death benefit, guaranteed cash accumulation value, and guaranteed level premiums. Policyholders can enhance their coverage with riders such as chronic illness, critical illness, terminal illness accelerated death benefit, and disability waiver of premium. Whole life insurance policies also offer flexible payment options and simplified underwriting processes for easier qualification.

Indexed Universal Life Insurance

Transamerica offers two types of indexed universal life (IUL) policies: the Transamerica Financial Choice IUL (FCIUL) and the Transamerica Financial Foundation IUL (FFIUL). Both policies provide death benefit protection and the potential for cash value accumulation. The FCIUL is designed for high earners aiming to maximize cash value and enjoy tax-advantaged income distributions, while the FFIUL caters to a broader audience with its emphasis on flexible premiums and traditional IUL benefits. Both policies include living benefit riders for additional financial protection in case of critical, chronic, or terminal illnesses.

Final Expense Life Insurance

Transamerica's Final Expense Solutions Portfolio offers level premium whole life insurance policies to help cover end-of-life expenses. These policies range from $1,000 to $50,000 in coverage and come with a guaranteed death benefit. This option helps protect families from unexpected financial burdens associated with final expenses, providing peace of mind for policyholders and their loved ones.

Customer complaints and satisfaction

Transamerica has received numerous complaints from customers, as evidenced by reviews on Trustpilot and the Better Business Bureau (BBB) website, as well as its below-average customer satisfaction ratings from J.D. Power. The National Association of Insurance Commissioners (NAIC) complaint index further indicates higher-than-average customer complaints for Transamerica.

Common issues raised by customers include delays in claims processing, unresponsive and rude customer service, difficulties in policy cancellations, and challenges in communicating with representatives. Some customers have reported extensive delays in receiving life insurance payouts, with cases dragging on for years without resolution. Others have encountered significant obstacles when trying to close accounts or policies, reflecting systemic inefficiencies within the company.

Reviews on Trustpilot highlight similar concerns, with many customers sharing negative experiences involving rude and incompetent employees, long wait times, and a lack of responsiveness from the company. Several individuals have also expressed frustration with the process of cancelling policies, describing it as "punishing" due to rejected forms, conflicting information, and unprofessionalism.

The BBB website contains a range of complaints spanning various issues, including loan requests, return of premium rider, surrender of policies, and issues with electronic payments. In some cases, customers have reported receiving misleading or incorrect information from Transamerica representatives, resulting in financial losses or delays in resolving their queries.

Transamerica's customer satisfaction ratings from J.D. Power further reinforce the negative sentiments expressed in customer reviews. In the 2023 U.S. Individual Life Insurance Study, Transamerica scored 757, which is below the industry average of 790. This ranking placed them third from the bottom among the companies reviewed for individual life insurance customer satisfaction. While their score improved slightly to 740 in 2022, it still indicates a lower-than-average performance in customer satisfaction.

The NAIC complaint index also supports the notion of higher-than-average customer complaints for Transamerica. From 2021 to 2023, their complaint index was consistently two times higher than the baseline, indicating a higher volume of complaints relative to other insurance providers.

Transamerica's financial products

Transamerica is an American holding company that offers a range of financial products and services. The company has a long history dating back to 1904 when A.P. Giannini founded the Bank of Italy in San Francisco. Over the years, Transamerica has evolved and expanded its offerings, and today it is primarily focused on insurance, investments, and retirement planning.

Insurance

Transamerica offers various life and health insurance policies, including term life, whole life, universal life, variable universal life, accidental death, and final expense insurance. The company provides multiple plan options that do not require a medical exam, and it also caters to foreign nationals with ties to the US. Transamerica's life insurance products offer flexible payment options, customisable coverage amounts, and optional rider benefits.

Investments

Transamerica offers investment options such as mutual funds and annuities. The company provides access to well-known industry names, enabling clients to build diverse and robust investment portfolios. Transamerica's annuities include variable and structured options, with the recent addition of the First Trust Equity Edge Index to enhance growth potential and protection features.

Retirement Planning

Transamerica's retirement division offers a comprehensive range of services, including defined benefit pension plans, defined contribution retirement plans (such as 401(k) and 403(b)), profit-sharing plans, and cash balance plans. They also provide plan-level record-keeping, administrative services, participant education, fiduciary risk mitigation, and compliance guidance. Additionally, Transamerica offers IRA rollover solutions to help individuals transfer their retirement accounts from their former employers.

Pros and cons of Transamerica life insurance

Transamerica offers a variety of life insurance products, which could make it a versatile choice for many. The company's strong financial ratings indicate reliability, but there are areas where it may fall short in customer satisfaction and availability. Here are some key pros and cons to consider:

Pros

• Numerous life insurance products sold: Transamerica offers five different life insurance policy types, including term, whole life, and universal life.
• Life insurance products available for foreign nationals: Transamerica is one of the few companies offering life insurance coverage to foreign nationals who are regular visitors or have ties to the U.S.
• Excellent AM Best financial strength rating: Transamerica received an A (Excellent) rating for financial strength, indicating its ability to pay future claims.

Cons

• Poor customer satisfaction ratings: Transamerica scored poorly in the J.D. Power studies for individual life insurance customer satisfaction, ranking third to last in 2023 and 2024.
• Above-baseline NAIC complaint index: The National Association of Insurance Commissioners (NAIC) complaint index indicates that Transamerica receives more complaints than expected for a company of its size.
• Some products are not available in every state: While Transamerica is licensed to sell policies in all U.S. states and Washington, D.C., some policies are not available in New York.

How to buy life insurance from Transamerica

Transamerica is still in business and offers a range of life insurance products. Here is a step-by-step guide on how to buy life insurance from Transamerica:

• Assess your needs: Before purchasing life insurance from Transamerica or any other provider, it is essential to evaluate your unique circumstances and determine the level of coverage you require. Consider factors such as your age, income, debts, mortgage, and anticipated funeral expenses. You can use online tools like Bankrate's life insurance calculator to estimate the amount of coverage you may need.
• Understand Transamerica's offerings: Transamerica offers a variety of life insurance policy types, including term, permanent, and final expense life insurance. Term life insurance provides coverage for a specific period, usually ranging from 10 to 30 years, and is suitable for those who want coverage for a limited time. Permanent life insurance offers lifelong coverage and includes a cash value component that policyholders can access. Final expense life insurance is designed to cover end-of-life expenses and helps protect families from unexpected financial burdens.
• Contact Transamerica: To initiate the process of purchasing life insurance from Transamerica, you can contact the company through their new policies phone number at 1-800-379-5498 or visit their website at transamerica.com. Their website provides resources and articles to help you learn more about life insurance and make an informed decision.
• Provide necessary information: When purchasing life insurance, you will need to provide personal information, including your age, health status, and lifestyle details. Be prepared to answer questions about your medical history, occupation, income, and any existing insurance policies you may have. This information will be used to assess your eligibility and determine the cost of your life insurance policy.
• Select your desired policy and riders: Transamerica offers several types of life insurance policies, as mentioned earlier. Choose the type of policy that best suits your needs and consider adding riders (optional policy add-ons) to customize your coverage. Riders may include features like a disability waiver of premium, income protection option, accidental death benefit, or terminal illness accelerated death benefit. Keep in mind that adding riders will likely increase the cost of your policy.
• Review the policy details and cost: Once you have selected your desired policy and riders, carefully review the policy documents to understand the coverage, exclusions, and any applicable fees or charges. Make sure you are comfortable with the terms and conditions before proceeding.
• Complete the application and underwriting process: Work with your Transamerica agent or representative to complete the application process, which may involve providing additional information or undergoing a medical exam, depending on the policy type and your circumstances. The underwriting process will assess your risk factors and determine your final premium amount.
• Make the necessary payments: After your application is approved, you will need to make regular premium payments to keep your life insurance policy active. Set up your preferred payment method and ensure that payments are made on time to maintain continuous coverage.

Remember to carefully review the terms and conditions of your life insurance policy and ask questions if anything is unclear. It is also advisable to compare offerings from multiple insurance providers before making a decision.

Frequently asked questions