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2021 Alert: Final Expense Insurance vs. Transamerica (brutal truth)

Differences between Final Expense Insurance and Transamerica

You need peace of mind as you grow older, and having life insurance as you age is one of those things that give you that much-needed peace of mind. With a good life insurance policy, it would be possible for you to pay off your mortgage, pay off your debts, and most importantly, you’d be able to live a comfortable life as a senior.

Life insurance also makes it possible and easy for your family to take care of your funeral and burial costs with ease, and without these costs feeling like a burden. But having general/whole life insurance isn’t all you could do for the best retirement, send off, or for less burden on your loved ones after your demise; sometimes it’s not enough, or the payout may be processed a little too late.

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If you are looking for a financial plan that would allow you to unburden your loved ones after your demise, even if you already have a life insurance cover, a final expense insurance cover might be the best insurance option for you.

What is the Final Expense Insurance?

Final Expense Insurance
Final Expense Insurance

Final expense insurance or burial insurance can be defined as a type of whole life insurance whose plans are designed to pay for your funeral and burial costs upon death. The costs also include the cremation costs, the cost of the headstone for the grave should you wish to have one, as well as the cost of the memorial service.

Keeping your affairs in order means that your family is aware of what you’d like to happen upon your demise, and the burial insurance allows you to not only direct our family on how you’d like your body to be taken care of it also takes care of the financial needs that come with burial/death, reducing the financial burden on your loved ones.

The burial insurance products offer death benefits of between $5,000 and $25,000, but the benefits could be higher or lower depending on the insurance company you opt for. It’s also worth noting that there is no law that forces your beneficiaries to use the death benefits exclusively for burial.

Which is the best insurance company for Final Expense Insurance?

Best insurance company for Final Expense Insurance?
Best insurance company for Final Expense Insurance?

While there are numerous companies offering numerous options for final expense insurance, you have to settle on one insurer. Unfortunately, choosing one insurer from a list of over ten insurers offering some of the most competitive rates, plans and products can be quite confusing, which is why you may need help to choose the best plan.

In this article, we’ll look at two of the leading insurance companies – Mutual of Omaha and Transamerica. These are two of the leading companies, but there are numerous differences between them, and we’ll help you choose which of the two companies would be a better fit for you.

So, let’s get started.

Mutual of Omaha vs. Transamerica Overview

Mutual of Omaha – Overview

Established in 1909, Mutual of Omaha is one of the reputable companies offering final expense insurance. While this insurer only started offering life insurance in 1926, Mutual of Omaha is today one of the leading insurers offering diverse life insurance policies.

The company offers full-service insurance products. The most interesting bit about Mutual of Omaha is that the company is categorized as a mutual company, which means that its policyholders own a small stake in the insurance company.

Transamerica – Overview

Established in 1904 with the idea of making financial security available to all, Transamerica might be the ideal insurance company for you. But what you may not know is that Transamerica wasn’t always the life insurance company that it is today. In fact, it wasn’t until 1999 when the company joined arms and became part of the Aegon N.V., the international finance organization, which rose to the top. Today, Aegon and Transamerica boast over 13 million customers spread across the US.

Mutual of Omaha vs. Transamerica company ratings

Mutual of Omaha is a top-rated and the most reputable final expense insurance company in the US. It has received A+ ratings from the Better Business Bureau. It also boasts the best financial ratings from Moody’s, AM Best, and S&P Global. It also boasts a high score from J.D. Power’s Customer Satisfaction scores.

Thanks to Transamerica’s impressive ratings, the company was one of the top-ranked companies in the J&D Power 2018 US Life Insurance Study.

Mutual of Omaha vs. Transamerica final expense insurance cost comparison

Mutual of Omaha offers more affordable final expense insurance covers compared to the covers offered by Transamerica. Mutual of Omaha’s rates are affordable for both male and female policyholders, whether young or middle-aged.

Transamerica, on the other hand, only offers lower premium rates for older men/women, as well as younger women.

Under Mutual of Omaha, males aged 30 and 50 pay premiums of $21.66 and $85.53, respectively, while females aged 30 and 50 pay premiums of $23.41 and $63.09, respectively.

On the other hand, Transamerica charges $22.36 and $79.12 for males aged 30 and 50 years; and $18.06 and $62.78 for females, respectively.

It should be noted that burial insurance policies offered by Mutual of Omaha vary depending on the value of the death benefit plans. A policy with a $10,000 death benefit, for example, will attract insurance premiums of $22.61 for female non-tobacco users aged 45, with no waiting period on the Living Promise plan and $27.00 on the 2-year graded Guaranteed Issue insurance plan. For 45-year males, the premiums payable each month will be $27.11 and $32.50, respectively (for the same plans above).

Mutual of Omaha vs. Transamerica types of Policies – Final Expense insurance products offered by Mutual of Omaha and Transamerica

Mutual of Omaha and Transamerica offers some of the best insurance products for anyone looking for burial insurance. But there are numerous differences in the plans offered by these two companies, which is why you must be careful when choosing plans by one insurer over the ones offered by the other.

Mutual of Omaha – Final Expense Insurance Policies

  • Guaranteed Use Whole Life Insurance

This insurance policy is one of the best final expense plans offered by Mutual of Omaha, with the best part about the policy being the fact that the policy is approved without a medical exam carried out. You also wouldn’t have to answer long questionnaires about your health-related matters.

This burial insurance product comes with varying death benefits of between $2,000 and $40,000, and in addition to the death benefits from the coverage, this insurance product also builds cash value over time when you are still alive. This policy is available for individuals between 45 and 85 years.

You will be happy to note that this insurance policy comes with fixed premiums that will remain unchanged for as long as you are alive and the policy is in effect. Also, the cash value portions of this life insurance policy are tax-deferred, which means that the policy earns a specific amount of interest, with risk-free gains.

On top of that, the company claims that as much as 85% of its life insurance claims are settled within 24 hours after the claims are made.

Besides the guaranteed insurance plan, Mutual of Omaha further boasts two additional types of final expense insurance policies; these are the level benefit and the graded benefit plan. These policies both fall under Mutual of Omaha’s Living Promise Insurance Policy.

  • Living Benefit Plan

This is a life insurance policy suitable for persons between 45 and 85 years. The insurance policies have a face value/death benefit of between $2,000 and $40,000. However, if you are looking for a plan in Washington State, the minimum value of the death benefits offered is $5,000.

This policy comes with an automatic accelerated death benefit option that applies to policyholders confined in nursing homes, as well as the ones with terminal ailments.

This insurance product has no waiting period. To qualify for the level benefit plan, you’ll need a diagnosis for a terminal illness and a medical statement confirming that you’d die in the 12-month period after applying for the product (the medical documents must be signed by a physician), or you should be confined a licensed nursing home for a minimum of 90 days, and it should be expected that you will be in the home for the remainder of your life.

What this means is that this insurance policy might be the best product for you if you are looking for an insurance plan that will help pay for your medical bills or your care in the nursing home.

This plan also comes with a rider, but you’d have to pay for the rider separately. This rider option is specifically the accidental death benefits rider, which is a rider option that will automatically double your death benefits in the event of death caused by an accident.

  • Graded Benefits Burial/Final Expense Insurance Plan

This is the other final expense insurance product offered by Mutual of Omaha. It is designed for interested policyholders between 45 and 80 years. But if you are in New York, looking for this policy, you will only qualify for it if you are aged between 50 and 75 years.

Unlike the living benefit plan, the graded benefit plan comes with a 2-year waiting period. Also, the maximum death benefits offered under the plan are lower and range from $2,000 to $20,000. If you are looking for this plan in Washington State, the minimum death benefits offered are higher, at $5,000.

Since the plan is on a 2-year waiting period, it means that if you die within the 2 years that you apply for the policy, even if your death is from natural causes, your beneficiaries will only be entitled to the full amount of premiums you’d paid by the time of your death, plus an additional 10%.

However, if your death comes after the 2-year graded period lapses, then your beneficiaries will be entitled to the full value of the death benefits insured. The only catch is that you cannot enjoy the benefits from this plan if you live in North Carolina, Arkansas, or Montana.

Transamerica Final Expense Insurance Plans

Like Mutual of Omaha, Transamerica offers three main types of final expense insurance plans. These plans are the (Preferred) Immediate Solution, 10-Pay Solution (Standard Immediate Solution), and Easy Solution.

The Preferred Immediate Solution is the cheapest plan out of the other two plans, while the Easy solution is, albeit ironically, the most expense final expense insurance solution.

  • Transamerica’s Easy Solution (Graded insurance plan)

This insurance plan features non-expiry insurance coverage, but it comes with a waiting period, fixed monthly premiums, and the benefits remain unchanged. The plan is, however, only approved after you answer specific health questions, better known as the C4 questions.

Transamerica’s Standard Final Expense Waiting/Graded Period Plan

This is a graded plan with a 2-year waiting period. Given the waiting period, the insurer won’t pay death benefits if you pass away during the waiting period; but they will refund the premiums paid by the time you die and an additional 10%. But if you surpass the 2-year wait period (accidental death), your beneficiaries will receive the full death benefits insured under the selected policy.

This plan is available for anyone between 18 and 80 years for death benefits of between $1,000 and $25,000. If you are in Pennsylvania, the minimum coverage for this plan is $5,000.

Before you buy the graded plans, you should know that the graded plan is the most expensive, and it also comes with many conditions, which makes it an unfriendly option.

  • Transamerica’s Standard Immediate Solution Policy

This is a non-expiry coverage insurance plan with no graded/waiting times. Its monthly premiums are fixed, as are the death benefits. But you have to answer the C3 health questions, and if you answer yes to any of the two C3 questions, you will be approved for the graded Easy Solution, while three yeses will mean that you are eligible for the graded plan. Since graded plans aren’t the best, you may want to skip Transamerica and settle for other companies, especially if you want to save money.

But if you qualify for this standard immediate coverage, then it means that you will enjoy full protection from day one since there is no waiting period. To be eligible, you must be between 45 and 85 years. The coverage range is between $1,000 or $5,000 in Washington State and a maximum of $25,000.

You should note, however, that death benefits are higher for younger individuals. The maximum death benefits for persons in the 56 – 65 age gap is $40,000, and $30,000 for persons in the 66-75 age gap; while you only get a maximum of $25,000 if you apply for this plan and you are between 76 and 85 years.

This plan comes with riders too, and you could opt to pay for the rider if you need it. This rider is the accelerated death benefit rider that comes with a nursing home care/coverage option.

10-Pay Insurance option.

This is the last type of Final Expense plan offered by Transamerica, under the Standard Immediate Solution. It is a plan that gives you the option of paying off your burial insurance plan in 10 years. It’s a unique plan, but the payment plans are also different.

More specifically, the monthly premiums will be almost double the normal insurance premiums payable, and you’d have to pay the full amount in 120 months. The payments will stop after the 120 months’ payments are completed. However, the coverage stays in place for the rest of your life. This ballooned payment isn’t, however, suitable for most people because it’s quite expensive.

  • Preferred Immediate Solution Final Expense Insurance Plan

Though it looks like the standard immediate solution with non-expiry coverage, never-decreasing benefits, fixed monthly premiums, and zero waiting period, you’d only qualify for this plan if you pass all the health questions on your application. Also, you shouldn’t have any prescriptions in your history. It comes with no wait time, though.

Like the rest, the minimum death benefits offered are $1,000, and the maximum is $25,000 for persons between 76 and 85 years; $30,000 for the 66-75 age gap, and $40,000 for the 56-65 age gap.

Mutual of Omaha vs. Transamerica Customer Reviews and Reputation

While both companies are highly rated, the burial insurance plans offered by Transamerica do not stack up well against the competition, and one would argue that they are significantly more expensive. There is also the fact that medical records matter in all the plans offered by Transamerica, but this isn’t the case with Mutual of Omaha, which offers affordable premiums, and the plans are approved with no medical records/questionnaires.

Regarding their reputations, Mutual of Omaha has a better reputation than Transamerica.

Mutual of Omaha vs. Transamerica: Pros and Cons

Pros and Cons of Mutual of Omaha vs. Transamerica
Pros and Cons of Mutual of Omaha vs. Transamerica

Mutual of Omaha Pros and Cons

Pros

  • Affordable premiums
  • No medical history/recorded needed
  • Reasonable insurance plans
  • Good reputation
  • The rider offered for specific products
  • Guaranteed issue life policy offered to seniors

Cons

  • Maximum coverage could be higher
  • No online purchasing option
  • The graded plan may not be the best.

Transamerica: Pros and Cons

Pros

  • Highly rated
  • Several burial insurance options
  • Standard Immediate solution has no waiting period.

Cons

  • Expensive plans
  • The graded plans are unreasonable, and all come with waiting periods.
  • Medical records required, and you must fill questionnaires.

Conclusion

If you are looking at final expense insurance covers offered by Mutual of Omaha and Transamerica, Mutual of Omaha offers better plans which are affordable, and you may be better off with this company over Transamerica, especially if you have pre-existing medical conditions.