Many people that own a Trustage term life insurance policy don’t know that a TruStage price increase happens every five years for their term life insurance product. Premium increases as you reach a new 5-year age band. This is very different than a traditional term life insurance with a level premium that remains the same for the life of the policy.
Let’s read the fine print for a TruStage term life insurance policy:
“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: 25, 30, 35, 40, 45, 50, 55, 60, 65, 70, and 75. Renewable to age 80.”
TruStage term life policy offers are good until you turn 70. You start with a lower monthly premium, then every five years TruStage has a mandatory price increase. When you hit a new 5 year age band, the premium goes up in price.
You pay more as you get older until you get to the point that it’s too expensive to pay the premium. Additionally, at the end of the term, you cannot convert the policy to whole life insurance.
In this article, we will examine the TruStage price increase to see if their term life insurance is best for you. You can also read our other review on Globe Life, AARP, Lumico, and Colonial Penn by clicking the link.
FOR EASIER NAVIGATION:
ABOUT TRUSTAGE LIFE INSURANCE
TruStage Life insurance is a subsidiary of CMFG (CUNA Mutual Financial Group) Life Insurance. All their life insurance products are issued by CMFG which provides insurance and financial products to credit unions members around the U.S. However, they expanded their offerings to include anyone interested in a life insurance policy.
Today, credit union membership is not required.
TruStage was formerly known as CUNA (Credit Union National Association) Mutual Company which was founded in 1935 when credit unions were formed to help Americans with their finances.
In February 2012, the company changed its name to CMFG. They are headquartered in Madison, Wisconsin with additional branch offices in Fort Worth, Texas, and Waverly, Iowa.
TruStage life insurance offers both term and whole life insurance policies as well as health, AD&D, and auto insurance. Life insurance and AD&D are both underwritten by CMFG. Their auto insurance is provided by Liberty Mutual and Esurance, while home insurance through Liberty Mutual.
The company also partners with GoHealth to provide health insurance. They also provide financial products such as bonds, commercial loans, mortgage loans, and asset protection services.
TRUSTAGE LIFE INSURANCE FINANCIAL RATINGS
The company’s financial ratings are important to assess the company’s ability to pay claims to beneficiaries. But, it does not affect the quality of the products they provide to clients. It shows the financial stability of the company.
TruStage Life Insurance has achieved an “A” rating or excellent with A.M. Best, a nationally recognized statistical rating organization for insurance companies in the United States. They offer ratings depending on the company’s ability to meet financial obligations to policyholders.
There are 16 total ratings ranging from Superior to Suspended. The company received the third-highest rating from A.M. Best.
Additionally, according to the National Association of Insurance Commissioners TruStage has a complaint ratio of 0.43. The median complaint ration for all insurance companies is 1. Meaning the company has a lower than average complaint ratio.
TRUSTAGE LIFE INSURANCE PRODUCTS
TruStage Life Insurance offers a simplified issue term life insurance and whole life insurance. Both do not require a medical exam, but you need to answer two health questions.
The company also offers a guaranteed acceptance life insurance plan that does not require health questions or a medical exam and does not provide instant coverage regardless of your medical condition.
TRUSTAGE WHOLE LIFE INSURANCE
Whole life insurance with TruStage is a simplified issue product, and you don’t need to take a medical exam or blood test as part of the underwriting process.
You can qualify by answering a couple of health questions. Your approval is based on your answers to the health questions and information obtained from the prescription database and the Medical Information Bureau.
TruStage whole life insurance features permanent protection that lasts your whole life with a guaranteed death benefit. The issue age is 18 to 85 years old. The death benefit ranges from $1,000 up to $100,000.
It also provides a cash value accumulation that grows on a tax-deferred basis which you can get if you cancel your policy or take a policy loan. Premiums never go up, and coverage never cancels due to age or declining health.
TRUSTAGE GUARANTEED ACCEPTANCE LIFE INSURANCE
TruStage also offers guaranteed acceptance whole life insurance with no health questions and no medical exam. The death benefit amount is lower between $1,000 and $25,000 which is designed to cover funeral and end of life expenses. You can qualify for this plan if you are between 45 and 80 years old.
As with most guaranteed issue life insurance, with the TruStage guaranteed acceptance plan is that you cannot be turned down because of your medical condition. The premium is fixed and guaranteed to never increase for life as long as you pay on time.
This guaranteed issue life insurance product has a 2-year waiting period is EXPENSIVE compared to other burial and final expense life insurance policies available from Funeral Funds.
TRUSTAGE TERM LIFE INSURANCE
Term life insurance is the most promoted product of the company (and should not be used for your burial insurance needs). While they offer whole life insurance and other financial products, their marketing is more focused on term life insurance (which IS NOT appropriate for burial or final expense insurance).
Term life insurance is one of the major types of life insurance that you can buy from TruStage. The purpose of term life is to protect your family financially when you pass away. It pays a death benefit that can cover the funeral cost, mortgage payments, other monthly bills and pay for your children’s education.
One of the features of TruStage term life insurance is the ability to obtain coverage without a medical exam. You can also get a lower death benefit amount according to your needs.
The face amount starts from $5,000 going up to $300,000. You can be approved instantly. You don’t have to wait weeks before getting covered. Once you’re approved, you can make the first payment, and you’re fully covered.
KEY FEATURES OF TRUSTAGE TERM LIFE INSURANCE:
- You can qualify for term life insurance without the medical exam.
- You can choose the term length. Choose between 5 and 30 years.
- You can choose a term length that covers the years when your family needed the money the most.
- If you die during the term your policy covers, your beneficiaries will receive a cash payout in the face amount of your policy.
- Your beneficiary will receive the payout tax-free. There is no income tax on a life insurance death benefit.
- TruStage term life is cheaper than whole life plans since it only covers you for a limited period of time (this applies to all term life insurance policies).
PROS & CONS OF TRUSTAGE TERM LIFE INSURANCE
- No medical exam required only answer a few health questions
- An easy online application process
- Get instant approval
- Available in lower death benefit amounts starting from $5,000.
- It is not a good product for burial or final expense insurance due to the factors mentioned below.
- Rates increase every five years to age 75
- The policy will expire at age 80 or when the term ends
- The maximum death benefit is only $300,000, Cannot purchase a policy greater than $300,000
- No available policy riders
- Rates appear to be expensive compared to other companies.
TRADITIONAL TERM LIFE – HOW IT WORKS
Term life insurance is simple, affordable and it provides protection for a specific period typically 10 to 30 years. This is the type of insurance policy endorsed by Dave Ramsey and other financial gurus. Some insurance companies offer level term life insurance where the premiums remain fixed for the duration of the policy.
Most life insurance companies offering level term life insurance lock-in premium at your current age. For example, if you purchased a $100,000 20-year term policy in your forties and pay $65.50 monthly, you will pay the same amount of premium in your sixties when the term ends.
If you pass away during the term of your policy, TruStage will give 100% benefit payout to your beneficiaries. If you outlive the term, you have the option to convert your policy to whole life insurance with permanent coverage without giving proof of insurability or undergoing the medical underwriting process again.
You also have the opportunity to renew the policy every year until you reach 95 years old or let the policy expire because you don’t need it anymore.
THIS IS HOW TRUSTAGE TERM LIFE INSURANCE WORKS
When buying TruStage term life insurance, you are not required to take a medical exam or physical as part of the underwriting process. The application can be made online in less than 10 minutes. All you need to do is answer two health questions.
You can buy $10,000 to $300,000 coverage. You can apply if you are a U.S. citizen between 18 and 69 years old.
What makes TruStage term life different from other types of life insurance policies? The answer is, it terminates. Yes, your policy ends, and it does not cover you for the rest of your life. Term life only lasts for a number of years, usually 10, 20 or 30 years or until you reach age 80.
If you pass away within the term, your beneficiary will receive the death benefit. However, if you turn 80 years old, or if your term comes to an end, the coverage is lost.
WHAT’S WRONG WITH TRUSTAGE TERM LIFE INSURANCE?
TruStage advertises that their term life rate is based on age and gender. The premium is based on 5-year age bands. The premium is only level for the first five years and increases every five years as the policyholder reaches new age bands 30, 35, 45, 50, 55, 60, 65, 70, and 75.
Your rates will go up every five years.
This type of premium increase is common in term life insurance if one doesn’t look closely at the fine print.
Let’s go back to their 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: 25, 30, 35, 40, 45, 50, 55, 60, 65, 70, and 75. Renewable to age 80.
Your monthly premiums are lower when you apply, but it will increase every five years. The premium could end up being as expensive as you get older. For example, you are a 42-year-old male in good health who doesn’t smoke.
TRUSTAGE PRICE INCREASES
The site shows that you will initially pay $65.50 for a 20 year $100,000 policy.
- When you turn 45, you will need to pay $86.50.
- When you turn 50, you will need to pay 114.50
- When you become 55, you will need to pay 170.50
- When you’re 60-year-old, your monthly premium will be $265.50 until the policy expires when you’re 62 years old.
You can renew your term life insurance policy until age 80 but the site does not display the prices, but you can predict where it goes.
According to TruStage rate chart, your monthly premiums increase higher the bigger your coverage gets. So if you get a $300,000 policy when you’re 42-year-old, you will pay $143 at the start and end up paying $622.10 before your policy ends.
You can get TruStage term life insurance without a medical exam. However, your rates could be higher if you’re a smoker because of the added risk to the company. For coverage amounts more than $100,000 your rates will be higher due to tobacco use.
ACCORDING TO THE TRUSTAGE WEBSITE:
“Initial premium rate is based on age and gender for all death benefit amounts; tobacco or nicotine substitute use is an additional premium factor for death benefits of $101,000 through $300,000.”
TruStage makes it easy for you to determine your premium with their online quoting system as well as the rate chart available on their website.
Important Note: TruStage term life insurance can be up to 38% more expensive compared with other companies. Several A-rated life insurance companies that offer 10 to 30-year term policy are cheaper, and they have a level premium. The premium is fixed and guaranteed to never increase for the entire length of the term.
Based on the rate chart TruStage term life insurance tends to be more expensive compared with other companies offering level term policies. Additionally, term life insurance is never appropriate for your burial insurance needs as you get older.
If you purchased term life insurance with TruStage with a premium that increases in price every five years, we hope you will replace it with level premium term life insurance.
We encourage you to consult an independent life insurance agency like Funeral Funds that can compare different policies and prices before buying a policy from TruStage. We will help you weigh your options before you make your final decision.
HOW CAN FUNERAL FUNDS HELP ME?
If you’re looking for no exam policy, let us help you; we will work with you side by side to find a plan that fits your needs.
We will work with you every step of the way to find the plan that fits your financial requirements and budget. You don’t have to waste your precious time anymore searching for multiple insurance companies because we will do the dirty work for you.
We will shop your case to different insurance carriers and get you the best price.
We work with many A+ rated insurance carriers that specialized in covering high-risk clients like you. We will search for all those companies to get the best rate. We will match you up with the best burial insurance company that gives the best rate.
We will assist you in securing the coverage you need at a rate you can afford. So, if you are looking for funeral insurance, or burial insurance, or life insurance, we can help. Fill out our quote form on this page or call us at (888) 862-9456 and we can give you an accurate quote.