Each time we buy something, whether it’s a life insurance policy or groceries, we tend to buy from an individual or an entity we trust. Trust equals safety and peace of mind instead of sleepless nights and buyer remorse. We are inclined to think that, if we trust a company in one area, then they must be trustworthy if we buy something else from them.
After all, I purchased the first product, and I’m delighted. For instance, most people regard a credit union bank as a trustworthy place to have a savings account or take loans at a low-interest rate. However, have you asked yourself if there were better choices when they sold you a life policy? You probably didn’t because you trust them.
This eye-opening TruStage Life Insurance review will reveal some facts you probably didn’t know and wished you had known before buying a policy from them.
TruStage Life Insurance Company History
TruStage is a subsidiary of CMFG Life Insurance Company (CUNA Mutual Financial Group) which provides insurance and financial products to credit unions and its members. The “CUNA” (pronounced “Cue-Nuh”) stands for “Credit Union National Association”.
It offers an array of financial products from bonds, auto insurance, and life insurance products, to mortgage loans, commercial loans, and asset protection service. CUNA Mutual Company was founded in 1935 and is headquartered in Madison, Wisconsin. It has additional offices in Iowa, Texas, and Kansas. The company was formerly known as CUNA, and in February 2012, changed its name to CMFG.
CUNA Life Insurance Company Financial Ratings
According to A.M. Best, CUNA (and its subsidiary TruStage) has an A (Excellent) rating. As mentioned in many of my life insurance review posts, financial ratings are an important factor in evaluating the company’s ability to remain in business while paying claims, however, it has nothing to do with the quality of products or services they provide to its clients. It demonstrates financial stability by having more assets than liabilities.
Products Offered by TruStage Life Insurance
TruStage offers property and casualty, auto and life insurance products. This review will focus on the life insurance products and services they offer, which are term, whole, and guaranteed issue life insurance. This will be intriguing. Let’s get to it!
TruStage Term Life Insurance
Before diving into TruStage’s term insurance, I would like to describe how traditional term life insurance works. You will need to have a basic understanding of life insurance before recognizing pitfalls and mistakes when choosing a life product.
This Is How Traditional Level Term Life Works
Term life insurance is straightforward, affordable protection that covers the insured for a specified period. The most common term or lengths are between 10 and 30 years, with the most common being a 20-year period. When buying a level term life insurance, your premiums and the death benefit remain fixed.
In other words, if you bought a 30-year term when you were in your thirties, you are guaranteed to keep the same premium payment until the end of your term which, in this case, would be in your sixties.
If the insured dies during the initial term, the company will pay the full death benefit to designated beneficiaries. If the insured outlives the term, he may convert the policy to permanent coverage without proving insurability or going through the underwriting process, renew it on an annual basis (ART) until the age of 95 (depending on the company), or drop the coverage because there is no need for it.
This Is How TruStage’s Term Life Works
When purchasing term life insurance through TruStage, the coverage lasts until age 80. The coverage doesn’t require you to undergo a medical exam as part of the underwriting process. It’s all done online in under 10 minutes, and all you have to do is to answer a few health questions.
The coverage amounts are from $10,000 to $300,000 in death benefit, and the ages to apply for coverage are 18 to 69. You may say, “This sounds perfect. What is wrong with this coverage?”
Here Is What’s Wrong with This Coverage
Your premium rate increases every five years as you reach a new rate band. Yes, unlike a traditional term for which your premiums are guaranteed to remain the same for the entire contract length, you can’t expect the same with TrueStage.
As you get older, you pay more until you get to a point that it’s too expensive to keep it. No wonder they let you keep it until the age of 80. Additionally, at the end of the term, there is no conversion privilege at the end of the term’s contract.
If you outlive your term (you reach 80 years old), your policy is out the window. Here is the worst part: the initial premium they give you isn’t even competitive price-wise. Let’s take a look at an example from the price charts below:
A 25-year-old male in good health buys a term policy from TruStage.
- The initial premium for the next four years is $75.25 per month.
- When he turns 30, he will pay $75.50 per month.
- When he turns 35, he will pay $81.50 per month.
- When he turns 40, he will pay $120.00 per month.
- When he turns 45, he will pay $156.00 per month.
- When he turns 50, he will pay $222.75 per month.
- When he turns 55, he will pay $315.50 per month.
- When he turns 60, he will pay $519.25 per month.
- When he turns 65, he will pay $813.75 per month.
You can renew it until age 80, for which they don’t display the prices, but you can see where this goes.
Here is what the 25-year-old could have done if he had bought a policy from Banner Life: $250,000 for a 25-year-old male in good health would cost him $18.49 per month. The premium remains THE SAME FOR 30 YEARS. I can see your argument (if you have one): With TruStage, the coverage remains until the age of 80, so it’s like a 55-year term.
Here is what the 25-year-old can do. He can buy a guaranteed universal life (GUL) coverage until the age of 100 years old from Protective Life for $82.86 per month. The premium payment stays the same until he reaches the age of 100.
TruStage’s Fine Print
TruStage® Term Life Insurance to Age 80 is made available through TruStage Insurance Agency, LLC and issued by CMFG Life Insurance Company. This is a term policy that increases when entering each five-year band: 30, 35, 45, 50, 55, 60, 65, 70, and 75. Base Policy Number: ICC16-A10a-039, A10a-039-2016, ICC17-SIT-2, 2017-SIT-2.
Whole Life Insurance
For those who seek permanent protection without restricted periods term life offers, whole life coverage is a perfect solution. You will not need to worry that your policy will expire at some point in the future after you can’t qualify for new coverage because of health issues or old age.
The premium and death benefit remain level throughout your lifetime. Whole life provides a cash accumulation element that grows on a tax-deferred basis which you can obtain if you cancel your policy or take a loan. TruStage’s whole life coverage is for those who seek final or burial expense solutions.
The coverage is simplified issue, meaning there are no exams or invasive tests you need to take as part of the underwriting process. Instead, there are a few health questions you need to answer, and the approval is based on the answers and the information obtained from other public sources such as the Medical Information Bureau and prescription database.
- Issue ages: 18–85
- Face amount: $1,000–$100,000
- Simplified issue whole life
- No exam, a few health questions
- Fixed premiums for life
Takeaway: I don’t take issue with TruStage’s whole life coverage as I took with their term coverage options. It’s a traditional life insurance without price fluctuations. They seem to be on par, price-wise, with other companies on the market. I noticed, however, that they are priced better for males than females of the same age. It’s your responsibility as a potential client to get as many quotes as possible.
Guaranteed Acceptance Whole Life Insurance
As the name implies, guaranteed issue life insurance guarantees your acceptance regardless of your medical conditions. You can’t be turned down for this coverage. Note, this type of coverage should never be your first choice when shopping for life insurance. You should only contemplate this type of protection after you have exhausted all other possibilities.
The only way an insurer can offer you coverage without asking any health questions is by limiting your face value amount (up to $25,000 in death benefit) and placing a two-year exclusion. This means, if you pass away due to natural causes during the first two years, TruStage will pay the total premiums paid plus 10 percent interest. In year three onwards, your beneficiaries will be eligible for 100 percent of the purchased death benefit. This isn’t ideal if you can qualify for a traditional coverage (level benefit).
- Issue ages: 45–80
- Face amount: $2,000–$25,000
- No health questions
- Guaranteed issue whole life
- Fixed premiums for life
Takeaway: I don’t see any issue with this plan, however, there are better companies, price-wise, if you are after guaranteed acceptance life insurance.
This TruStage Life Insurance review is just one example of how buying life insurance by yourself can be detrimental to your pocketbook and your beneficiaries. If you bought term life insurance from TruStage, I hope you can replace it with a legitimate term life insurance. If not, get ready for a price increase every five years.
Remember, there are no “deals” when it comes to life insurance rates. If a company offers no-exam coverage or guaranteed issue plans, you are paying for that convenience. Life insurance prices are fixed by law and are determined by the underwriter based on your health and the risk you pose to the carrier.
We at Effortless Insurance represent more than 50 carriers. Our loyalty is to our clients, not the insurance carriers. We demonstrate our commitment by placing clients with the appropriate insurer for them with the highest likelihood for approval.
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