Transamerica Life Insurance Review

Company Overview

Transamerica's operations date back to 1906, when San Francisco entrepreneur Amadeo P. Giannini founded a bank with the intention of serving a wide range of customers. In 1928, he then created a holding company called the Trans-America Corporation, which at the time owned Bank of America as well as a number of other financial institutions. Transamerica's headquarters is currently located in Cedar Rapids, Iowa.

Pros Explained

• Multiple no-medical-exam policy options: The company makes up to $2 million in coverage available without a medical exam to healthy applicants. 
• Living benefits included on some policies at no upfront cost: Some Transamerica policies include living benefit riders for terminal, critical, and chronic illnesses at no upfront cost. These let you access a portion of the death benefit early if you’re diagnosed with a qualifying illness.
• Wide range of riders available: Transamerica offers a range of riders with which you can customize coverage (including a disability income rider, which is a rare offering among the 90 life insurance companies we reviewed).

Cons Explained

• More complaints than expected: The company received more complaints than expected for a company of its size over the past three years.
• Ranks poorly for customer satisfaction: Transamerica scored poorly in the J.D. Power 2021 U.S. Individual Life Insurance Study. The study ranks major insurers' overall customer satisfaction based on communication, interaction, price, product offerings, and statements.

Complaint Index

The National Association of Insurance Commissioners (NAIC) calculates an annual complaint index to help consumers understand how many complaints insurance companies receive based on their size. For example, a complaint index over 1.00 means an insurer received more complaints than expected for its size, whereas a complaint index below 1.00 indicates that the company received fewer complaints than expected. 

Transamerica received somewhat more complaints than expected and has a three-year-average complaint index of 1.37. This ratio of complaints is mildly concerning when you consider that most of our other best life insurance companies have a complaint index of less than 1.00.

Third-Party Ratings

Transamerica received an AM Best rating of A (Excellent). AM Best ratings measure how financially strong insurance companies are. This way, consumers can get an idea of how likely an insurance company is to meet its contractual insurance obligations. An A (Excellent) grade indicates that Transamerica has an excellent ability to meet its ongoing insurance obligations.

Unfortunately, Transamerica did not score well for customer satisfaction, which may not be surprising considering it received more complaints than expected. The company scored 19th out of 21 major life insurance companies in the J.D. Power 2021 U.S. Individual Life Insurance Study, which is well below the industry average. 

Competition 

When determining which company to choose for your life insurance needs, it’s helpful to compare a few different insurers.

Policies Available

Transamerica offers the following types of policies:

Term Life Insurance

Term life insurance covers you for a certain number of years and is not designed to be permanent. That said, it’s much more affordable than permanent coverage options like whole and universal life. Transamerica’s term policies are available for periods of up to 30 years and can be converted to permanent coverage before the end of the term or renewed on an annual basis when the initial term expires.

Whole Life Insurance

Whole life insurance is a type of permanent coverage, meaning it’s designed to last your lifetime. It has a tax-deferred cash value component that builds value, and you may be able to access it via policy loans. The death benefit and premiums in a whole life policy are fixed throughout the life of the policy. If you miss a payment, your coverage could lapse. 

Final Expense Life Insurance

Final expense insurance is a small whole life policy designed to cover final expenses such as burial costs and medical bills. You can apply for coverage up to $50,000 without a medical exam. Unlike some other companies’ final expense policies, you can apply for coverage up to age 85. Some policies have a graded death benefit, which limits coverage for the first two policy years.

Indexed Universal Life Insurance

Indexed universal life (IUL) insurance is a universal life policy in which the cash value is pegged to a market indicator, such as the S&P 500. Unlike a variable life insurance policy, the cash value is not directly invested in the market so you won’t lose value based on negative performance. However, gains are also capped, so it’s important to understand how gains are credited to the policy before signing up.

Available Riders

Transamerica makes a wide selection of riders available on its life insurance policies. Riders are extra features you can add to your coverage, usually for a cost. But some riders don’t have any upfront cost, such as certain living benefit riders. Instead, you pay an administration fee if you elect to use them.

Disability Income Rider

Few other life insurance companies we reviewed offer this rider available, which can supplement your income should you become totally disabled.

ADB: Terminal Illness

This is a type of accelerated death benefit (ADB) rider that lets you access the death benefit early if you’re diagnosed with a terminal illness. 

ADB: Chronic Illness

The chronic illness rider lets you accelerate the death benefit if you’re diagnosed with a chronic illness and are unable to perform at least two activities of daily living, or are severely cognitively impaired. It is another type of ADB.

ADB: Critical Illness

The critical illness ADB lets you access the death benefit early if you suffer a critical illness, such as a heart attack or a certain type of cancer.

Guaranteed Insurability Rider

A guaranteed insurability rider lets you increase your coverage upon certain option dates without having to go through underwriting. 

Child Term

With a child term rider, you can add some limited coverage for your children to your own policy. One rider usually covers all eligible children, and they have the option to convert this to permanent coverage upon reaching adulthood.

Waiver of Premium

This rider waives your premium payments in the event you become totally disabled.

Accidental Death Benefit 

With this rider, your beneficiaries get an increased payout should you die as the result of a qualifying accident. 

Customer Service

Those looking to reach Transamerica’s customer service have a few options. They can submit their queries through an online contact form or email or connect with an agent via phone at 800-797-2643. To ensure the customer support process is as seamless as possible, Transamerica recommends sending the following information via email:

• Your name and relationship to the policy or owner
• Your policy number (or type of policy if policy number is unknown)
• The policy owner’s name on the policy
• The policy owner's city and state of residence
• Your phone number
• A detailed explanation of what you need

Price

Transamerica charges fairly average prices for its term policies compared to 31 other life insurance companies we reviewed. We gathered quotes for 30-year $250,000 term policies for males and females who are ages 25, 40, and 55 and in excellent health. 

Final Verdict

Transamerica is one of our best life insurance companies and specifically made the list for policy customization. This means that if you want the ability to personalize your coverage with a wide array of available riders, or add-on features, Transamerica is a good choice. In particular, the company offers a disability income rider, which is not available from most of the 90 life insurance companies we reviewed. 

However, Transamerica made a very poor showing in the J.D. Power 2021 U.S. Individual Life Insurance Study. Out of 21 major life insurance companies, it came in 19th for customer satisfaction. This may give some consumers pause, especially if they only need basic life insurance coverage without any bells and whistles.

FAQs

Is Transamerica trustworthy?

Two major independent credit rating agencies offer wildly diverging impressions of how reliably Transamerica demonstrates its ability to meet its responsibilities to its customers (AM Best gives it an A rating, while J.D. Power ranked it 19th out of 21 life insurances companies for customer satisfaction in a 2021 survey).

How long does it take for Transamerica life insurance to pay out?

Transamerica's own website asks its customers to allow up to three weeks for receipt of payouts on claims.

What is the death benefit for Transamerica life insurance?

Transamerica bases its death benefit on the face amount for the accidental death of the insured (or limits it to 110% of the sum of premiums paid minus the loan balance in the event of the insured's death from any other cause).

Can I cash out of Transamerica?

You can, but if you cash out before you reach 59½, you will probably have to pay a 10% federal tax penalty on whatever amount you withdraw from your policy.

Methodology

We designed a comprehensive rating methodology based on consumer priorities and life insurance company fundamentals to rank more than 90 insurers across five general categories: financial stability, customer satisfaction, product and feature variety, overall buying experience, and cost.

In order to do this, we collected over 5,000 data points and scored each company based on 55 metrics. We grouped metrics by category to see how insurers performed in each and then weighted category scores to determine how companies performed overall.

To learn more, read our full Life Insurance Methodology.