Large insurance companies have cash to persuade and impress. Their multimillion-dollar advertising budgets permit them to hire famous celebrities as spokespeople and produce glittery “Buy it NOW!” media ads. We will not cast shade on these insurance companies because they are big. Their finances are secure, and these insurance giants can pay claims. We suggest consumers stop a moment and think before they buy. In this Article we will look at Transamerica Burial Insurance.
The premium rates for a given burial insurance policy might be attractive, but what about the underwriting? Policies might not cover conditions such as diabetes and might expire when the insured is 80 years old. Other insurance companies might have premium increases every 3 to 5 years. The underwriting clauses of the policy need examining. This is true about Transamerica.
The Skinny on Transamerica Burial Insurance
Transamerica is a very well-known company and has been in financial services for over a hundred years. One of its main lines of business is insurance, and Transamerica offers final expense, or burial insurance policies.
Transamerica scores high financial rating. Transamerica’s AM Best rating is A+, and other rating companies give Transamerica high grades. It all creates an image of a well-established insurance burial insurance company.
The first thing to remember is that reputation does not always translate into the best policy. Insurance is a private affair. People must look for a coverage that suits their needs at prices that they can afford. The policies must be easy to understand, and premium payments need to be simple.
Transamerica “Solution” Burial Insurance
Transamerica offers three different burial insurance policies that go under the Solution umbrella. All three of these are whole life insurance which, in our opinion, is better for a senior citizen than term insurance.
The Solution policy that an applicant qualifies for depends on that individual’s health. This is no big surprise because health is a major factor in any burial insurance policy (We can tell you that one rule of thumb is that the healthier you are, the lower your premiums will be). Here are some general qualities of Transamerica’s burial insurance policies:
- The premiums are fixed. You do not have to worry about periodic increases, which some companies will do every 3 to 5 years.
- The coverage will never expire, provided you pay your premiums.
- Two of the Transamerica burial insurance products offer immediate coverage.
- The benefits are not going to decrease. If you take out a burial policy with Transamerica for $5000, that is what will be paid to your beneficiaries.
The underwriting of the Transamerica Solution is based on the health of the applicant. However, Transamerica is a little bit more lenient than most for the following reasons.
- There is no height and weight ratio. The height to weight ratio can impact the premium charge. If you happen to be heavier than what is generally accepted for your height, you might end up with a higher premium. Transamerica does not have a height and weight ratio. This means that hefty people are not penalized because they weigh a few pounds more than average.
- No medical exam is required for burial insurance. Transamerica does not ask for a medical exam to apply for the Transamerica Burial Insurance policy. You do have to provide health-related information, however.
- No mandatory personal health interview. Transamerica does not automatically order a personal health interview. It is a random request, and the meeting itself takes a little bit more than 10 minutes of your time.
Transamerica will ask you to fill out a health questionnaire, furnish your prescription history, and provide your MIB file.
Why This Information?
The health questionnaire is standard for burial insurance. You must accept the fact that there are certain health conditions that an insurance company will not cover. Prescription history is a way of determining if an applicant is telling the truth in the questionnaire. Prescriptions are used to treat certain health conditions and the medicine will corroborate your answers on the questionnaire.
The MIB file is the information that you provided to other insurance companies. If there is a disparity between your responses on the Transamerica questionnaire and information you supplied to another insurance company, it raises some serious questions.
The Knockout Questions
These are what can disqualify an applicant for a given policy. The knockout questions ask if you have a given health condition. If you answer “yes” to two knockout questions, then you do not qualify for coverage. Transamerica places these questions at the front of their health questionnaire.
This seems to be a bitter pill to swallow, but it is common with burial insurance policies. Insurance companies are only going to take on so much risk, and certain health conditions generate a higher risk than others. Transamerica has these knockout questions at the front so that you will know immediately whether you should bother to continue the application process.
Having said all this, we want to introduce to you the Solution policies Transamerica is offering to prospective buyers.
The Transamerica Solution
The knockout questions are the first screening process for an applicant. Let us suppose that you have answered “no” to all the knockout questions. The next stage is where Transamerica determines which of its Solution products you qualify for. Below the knockout questions on the questionnaire are the C4 questions.
These are also health questions, and a “yes” answer might prohibit you from buying a particular Solution product. We want to point out that some of those C4 questions involve common elderly conditions such as diabetes, angina, and stent or pacemaker implants.
Let us suppose that you answer “yes” to one of the questions. You then qualify for the Easy Solution burial insurance policy only. (N.B. if you answer “yes” to two or more of the C4 questions, you will not be eligible for any of the Solution products).
1. Easy Solution (Graded) Plan
You can buy this policy if you are 18-80 years of age. The minimum amount is $1000, except in Pennsylvania, where there is a minimum of $5000. The maximum you can purchase is $25,000. That maximum seems to be a good deal because there are insurance companies where the maximum amount of burial insurance available is much less. Unfortunately, we believe this is the only good thing about Easy Solution.
Easy Solution comes with a two-year waiting period. Any policyholder who passes away from natural causes during that time is refunded all premiums and 10% interest. If there’s a death by accident, then Transamerica will pay the death benefit in full.
The trouble with this product is the C4 questions. There are other insurance companies who will offer coverage for the same conditions which Transamerica won’t cover. Other companies will also charge lower premiums and not force the two years waiting period on the insured.
2. Standard Immediate Solution Plan
You can purchase this policy if you’re between 45 and 85 years of age, while younger people may apply but under different underwriting guidelines. You can buy as little as $1,000 in insurance coverage, while the minimum in the state of Washington is $5,000. Age determines the maximum amount one can purchase. It goes on a sliding scale so that someone at 50 may buy $55,000 worth of coverage, and someone over 75 will only get $25,000 worth. There is no waiting period and this policy has full first-day protection.
Once again, you are faced with knockout questions. There are also the C3 questions. Anyone who answers “yes” to C3 questions is bumped to the Easy Solution (Graded) Plan.
The Standard Immediate Solution policy has some reasonably interesting riders that are a part of the coverage and do not cost the insured anything extra. These are:
- Accelerated Death Benefit Rider
- Accelerated Death Benefit Rider with Nursing Home Option
- Accidental Death Benefit Rider
- Children’s and Grandchildren’s Benefit Rider.
So, why do we not like this product? Granted, it does offer immediate protection and there is no waiting period, but it is costly. There is also the problem with the C3 questions. We believe you can do better elsewhere.
3. Preferred Immediate Solution
This is Transamerica’s Cadillac burial insurance plan. You must have none of the medical conditions listed on the questionnaire, and your prescription history must corroborate this. The full benefit is available from the very first day of your policy, and there is no waiting period at all.
The insured faces the same restrictions on the amount of coverage based on age that you have the Standard Immediate Solution product. The riders found in the Standard Immediate Solution product are also in the Preferred Immediate Solution. There are some conditions which Preferred Immediate Solution covers that are not found with other insurance company these include:
The same riders that are available in the Standard Immediate Solution policy are available in the Preferred Immediate Solution product.
The problem that we have with this product is the expense is significantly more than the other burial insurance companies would charge. You also must wait a while before you find out if you will be approved or declined. It is almost immediate with other carriers.
It’s Premium Payment.
Both the Standard Immediate Solution and the Preferred Immediate solution have what Transamerica calls the 10 Pay Option.
This is very straightforward. You can pay off the policy in 10 years. Keep in mind monthly premiums are going to be nearly double what you would ordinarily pay, but you only will pay for 120 months. After that, payments stop but the benefit is there until the insured dies.
Transamerica also permits policyholders to use the Direct Express debit card to pay premiums. Social Security issues this and Transamerica will only accept this type of debit card for premium payment.
If an applicant had issues with alcohol or drug abuse in the previous 13 to 24 months, Transamerica gives full first-day coverage.
Transamerica is a good company, but we don’t think their burial insurance product is the best. It is expensive and other companies can offer more coverage and lower prices. The only way to know is to do some shopping and pay close attention to the underwriting of the insurance company
Underwriting is confusing for a novice. Senior citizens don’t always know what to look for and coverages might be confusing. Lack of knowledge can lead to buying the wrong type of insurance. We urge people to purchase their insurance from a reputable independent insurance agent.
An independent insurance agent represents several companies. This professional can do all the underwriting review work for the buyer and offer a selection. It allows a person to have a better chance of choosing the right policy to fit their needs.
About Insurance for Final Expense
Here at Insurance for Final Expense, we are an independent insurance agency and we are committed to helping people make the best choice.
We want you to tell us what you wish to have in the coverage. A face-to-face meeting is the best way to share that information, and we listen patiently to what a client would like to have in insurance coverage. We are more than happy to explain the various nuances of insurance, but we will not preach.
We look carefully at the companies we represent, concentrating on the client’s expectations and not worrying about how much commission we get from the insurance companies. Once we select those companies that are a good fit, we will present them to the client. All questions are going to be answered thoroughly and professionally.
We admit we want to have a long-term relationship with any client. You only have one chance to make a good first impression and we do our best to show that we are the agent with whom a person can do business. We’ve been very successful in helping people get the kind of burial insurance that meets their coverage needs. We will be happy to supply you with references, and we urge you to check out about us on consumer boards and other review sources. We have built a solid reputation for integrity, and we want to be of service to you.
Please feel free to contact us at your convenience to discuss Transamerica burial insurance or any other final expense insurers, . We look forward to being of service to you.