Transamerica Living Benefits [Quick Guide To Ins & Outs]

Transamerica offers life insurance with living benefits through its new coverage called “trendsetter”. It is a new form of term life insurance in the market. It is meant for holders that expect some challenges such as chronic illness in their later life.

Before we start, let’s learn about the history of Transamerica.

Company’s Brief History

The company was started in 1904 by Gianini Amadeo. It offers term life insurance alongside other products. The company acquired accidental life insurance and changed its name to accidental life insurance.

In the 1980s, it concentrated on financial services on investments and retirements. The company became Transamerica Life Insurance Company in 2008 and offers both retirement products, groups, and individual life insurance. The new products include trendsetter LB and Transamerica living benefits. The policy allows you to access benefits when are still alive.

You can use such benefits to settle bills if something unexpected happens to make you lose an income. It is one of the most affordable insurance plans in the American market. You will pay lower premiums compared to people who opt for permanent life insurance.

Why Living Benefit Is Something To Consider?

If you are used to the traditional covers, you need to consider this new and exciting coverage. Here are a few thoughts that make it necessary to get the cover.

First, LB is a term life insurance cover and it comes with fixed premiums that should be paid within a term of 30, 25, 20, 15, and 10 years.

Secondly, the policy was designed with the future financial needs of the insured at heart. It allows them to receive cash benefits when they face chronic or terminal illnesses. Perhaps it is the only policy that gives cash to the insured without needing them to go through a medical exam. We have a detailed article on Transamerica no exam life insurance.

How It Works

LB allows holders diagnosed with chronic or terminal illness a chance to access part of their death benefits. You will be allowed to receive 24% of the policies of death benefits.

But, it is necessary to demonstrate that they are unable to perform any two out of the 6 basic living activities. The activities include transferring, toileting, eating, dressing, continence, and bathing. They should be unable to perform some of these tasks for a span of 90 consecutive days.

If the insured cannot perform any of the two tasks, they qualify for 90 percent of their death benefit. They may receive an amount that does not exceed $1,500,000. On the other hand, the minimum that the insured could receive is $1000 per year.

Critical Illness

If the holder has a critical illness, they will be entitled to an advance of 90% of their death benefit. But, it may be necessary that a licensed physician declares that they have the condition. The condition includes paralysis. It may be caused by loss of limbs, blindness, amyotrophic lateral sclerosis, and end-stage renal failure.

Other critical illnesses include stroke, heart attack, cancer, and a major organ transplant. Such persons may receive a face amount of about five hundred thousand dollars and some minimum amount of two thousand five hundred dollars.

Terminal Illness

A policyholder diagnosed with a terminal illness will be entitled to a portion of the death benefit. The money may be paid in a lump sum after the physician diagnoses that the insured has less than a year to live.

The total amount to be received may be 100 percent of the death benefit or a maximum of $1.5 million. Besides, the smallest amount of money they may receive in such a case is $5,000.

Why Is The Policy Important?

Life has plenty of surprises. The surprises may sometimes throw the insured’s financial plans in disarray. They include unexpected illness or a serious medical condition.

Such conditions may cause major devastation to the families’ resources. Unfortunately, the traditional cover may only release the benefits before you are gone.

This is where living benefits come in. It ensures that your financial goals are not curtailed by critical or chronic illnesses. It also comes in handy if you are diagnosed with a terminal illness.

Studies show that the majority of Americans suffer from chronic illness. Such people hardly get assistance from traditional term life insurance. But, the new trendsetter living benefits policy has come up with a solution to the problem.

They Perform The Following Functions:

  • Provide fund for treatment which may not be covered by health insurance policies.
  • It can be used to pay the mortgage.
  • It provides income to be used to pay bills.
  • Avail income to replace the loss of wages caused by illness.
  • Provide income to be used to take care of home chores.
  • Income to survive on so that you don’t start spending retirement funds.

Thus, Trendsetter offers more value than traditional term life insurance. It is the surest method to use to protect your family in the event of unexpected illness.

Transamerica provides a cheap policy to the policyholder. It avails cash benefits if the holder is diagnosed with chronic, terminal or critical.

It is a good policy that is convertible into permanent life cover. This can be done without the need to provide any insurability evidence. However, this is only possible if it is done before the 70th birthday.

Investment Opportunities

Transamerica provides a variety of income-generating options. The most renowned one is the Transamerica income edge.

It can help one generate income by offering investment opportunities. It guarantees a steady and reliable income regardless of the policy value. The company offers a 7 % guaranteed value depending on the age and the time you make the investment. It raises its finances by investing in high growth stocks.

Transamerica income edge allows individuals above 59 years to invest. It guarantees them a stream of income while they continue working. It offers the following benefits.

Protects the investors’ money even if the market dwindles. However, it is vital to ensure that one does not make withdrawals beyond a stated amount. It means that the number of premiums invested is protected from market volatility.

It’s Flexible

You are at liberty to allocate up to 80% of your premiums in the available options. When you do this, it allows you to control your investment.

It enables you to lock your investment gains top your current policy value.

Why Buying This?

  • It allows you to access your benefits while still living.
  • The policy helps you to pay bills if you are diagnosed with a terminal or chronic illness.
  • It is possible to have the policy accelerated.
  • It allows you to replace the income in the household and cater for both facility and home care.

Types Of Coverage Offered By Transamerica

The company offers a variety of coverage. They range from whole life, universal and term insurance policies. It also deals with final expenses policies and accidental death coverage.

But, the most popular policy is living benefits. The policy provides death benefit coverage to up to $2 million. This option allows the insured to have an accelerated death benefit. This is possible if the holder contracts terminal, critical or chronic illness. It also gives holders an opportunity to convert it to a permanent policy as soon as the term expires.

Options Available

Transamerica allows one to choose whether to have the benefits increased or decreased. It also allows them to remain at the same level if they choose. Here are the details for each option.

Decreasing Term: The amount of money that will be available to the beneficiaries will decrease with time. So, the premiums go down as the needs reduce.

Level Term: The option allows the benefits to be paid to remain the same throughout the term of the policy. The option is known as a guaranteed or fixed death benefit.

Increasing Term: It allows the death benefits payouts to increase over the term of the policy. It is an ideal policy for anyone anticipating a major expense in their life.

Getting Lower Rates: Although the process may determine your rates, you will need to meet some conditions to qualify for the preferred plus rates.

Here are the eligibility requirements:

  • You should not be a tobacco user.
  • You should not have a history of substance or alcohol abuse.
  • Family history should be free of specified impairments and heart diseases.
  • Your driving record should be clean and free from DUIs and DWIs. You must be free from convictions and suspension.
  • Have a healthy BMI and normal blood pressure.
  • Your occupation and hobbies should be low risk.

At this point, we have said much about Transamerica’s living benefits. Let’s now turn our focus our attention on riders.

Living Benefits Riders

A living benefit rider could also be referred to as the accelerated death benefits. The rider could be added to the existing policies. The purpose of the rider is to enable the policyholder to use their life insurance benefits before they die.

For instance, when they sustain serious illness or injury, it also comes in handy when they incur a debilitating bill or when they contract a terminal illness.

The riders will also be considered when the illness affects the policy holder’s ability to earn some income. LB enables the policyholders to access part of their life insurance benefits before they die.

The living benefits policy comes with various policy riders. They include income protection options, accidental death benefits, and children’s insurance riders.

Others include a disability waiver of premium, income protection, and monthly disability income rider. Each of these riders serves a specified purpose.

Let’s Take Some Time to Consider Each Of The Riders

Monthly Disability Income Rider

It is intended to cushion the policyholder when they get disabled. But it must be difficult for them to perform their regular occupational duties. The rider can provide an income for a period of up to 24 months.

Income Protection Option

The rider provides the option that allows the insured to say how the death benefit will be paid.

Disability Premium Waiver Rider

It will waive all the premium payments when the insured becomes disabled. The rider has a six-month wait after the insured became disabled before premiums are waived. Such premiums could be waived up to 65 years of age.

Children’s Insurance Rider

They provide coverage to the children of policyholders up to the age of 25. It is not mandatory for such children to undergo a medical exam. Also, the coverage may go up to $25,000. Besides, the coverage may be converted into permanent life insurance when the child turns 25 years.

Accidental Death Benefit

It is one of the riders for LB. It pays an extra death benefit of up to three hundred thousand dollars if the insured dies from an accident.

Benefits Of The Rider

The benefits from the rider may be restricted or unrestricted. If not restricted, you may use the funds to cater for adult daycare expenses.

Besides, you may use it to buy equipment like a wheelchair or ramp or pay for nursing home care. In some cases, you will be allowed to use the benefits to take your spouse out on a trip.

Who Can Use The Living Benefit Rider?

The rider is reserved for the policyholders. When the insured encounters serious challenges in their health it comes in handy. The challenges may include illness and injury.

The victims will qualify for the accelerated payout. All that needs to be done is to provide proof that you have the condition. This can be done through diagnosis.

The Amount That You May Get In Advance

The living benefits rider pays between 24-100 % of the death benefit. It all depends on the company in question. The rule of thumb is that any company that pays less than 100 percent will pay the remaining benefits to the beneficiary.

Notice that once you take a rider, the insurer updates the policy. It makes the remaining death benefits to be known. The policy will remain active until you die.

But you must continue to pay the adjusted premiums. Also, the premium payment may be adjusted so as to suit the new desired level of the death benefit amount.

Will The Benefits Be Taxable?

There are cases when the benefits may trigger some taxes. It all depends on when the company makes the payment. But if you are taking advantage of accelerated death benefits, the proceeds will not be taxed. Also, where you live is important. It determines whether the benefits will be subjected to tax or not.

The rider may come free of charge but some companies may charge a fee if you just added it to the existing policy. The addition may attract a one-time fee at the point of signing up.

A few companies (i.e. Open Care) may allow you to add the rider. But you will not get the chance to use the benefits until the end of a certain period of time.

Some insurance companies charge a certain percentage of the payout as an administration fee. It means that you will end up receiving less amount.

Some other companies will deduct the fees from the benefits you get. It means that the policyholder ends up getting slightly less than what they expected.

Frequently Asked Questions (FAQs)

Life insurance is still the best way of protecting your loved ones. Very few people have the right information on how it does this. It is even worse for a case where families have to deal with unexpected eventualities.

If something unexpected happens, a policy that ensures life goes on uninterrupted is critical. Transamerica living benefits ensure just that. Here are some frequently asked questions about the cover.

Q1. Why Should One Go For Living Benefits?

Statistics show that a bigger percentage of people become terminally ill as they age. Stroke, heart attack, is some of the terminal illnesses to be considered.

Thus, they make buying Transamerica LB policy necessary. The policy guarantees enough money to cater to such eventualities.

Q2. What Makes The Transamerica Living Benefits Policies Popular?

Other life insurance policies will only release the benefits after the insured dies. They do not provide benefits to the insured when they get incapacitated. This is not the case for LB.

Q3. How One Gain Does From Living Benefits Insurance?

You will have access to the death benefits cash if something unexpected happens. It allows you to benefit from the fruits of your life insurance cover before you die. If you incur terminal, critical, or even chronic illness, your needs will be catered for.

Q4. What Differences Exist Between The Accelerated Death And The Living Benefit?

They both offer funds to use in the event of critical, chronic, and terminal illnesses. A living benefit cover helps to accelerate the life insurance policy’s face amount. It avails part of benefits to using when you still live.

Bottom Line

Transamerica living benefits is a valuable tool for policyholders. It is even more critical to those that anticipate facing a terminal or chronic illness later in life.

It can help the victim take control of their lives when they become incapacitated.

Linda Chavez

I'm a burial & senior life insurance expert, independent agent, Founder & CEO of Seniors Life Insurance Finder. I have been working in this sector since 2004 and established my own company in 2014. I have a team of seven members, and we are trying hard to share the knowledge we've gathered. We know how difficult often it is to find an affordable policy. Hence, we are doing our best to help you.