We do not represent TruStage, nor do we have an affiliate marketing relationship with Trustage. In fact, TruStage is not among the best life insurance companies that we offer. With this in mind, we have done our best to present as unbiased review of TruStage as possible.
Table of Contents:
What is TruStage Insurance?
If you’re a member of a credit union, there’s a good chance you’ve received direct marketing materials from TruStage. Or, your credit union may have sent you a “special offer” for life insurance that TruStage is making available for credit union members.
Since the offer is reserved for members only, people often assume they’re getting a good deal—and maybe that’s true. But to know for sure, you need to know a little more about TruStage and the life insurance it sells.
CUNA
TruStage Insurance Agency is, for all practical purposes, the life insurance marketing division of the CUNA (“Credit Union National Association”) Mutual family of companies. Based in Wisconsin, CUNA Mutual serves a very specific niche.
Member companies partner with thousands of credit unions throughout the country, offering financial services to credit union members and to the credit unions themselves.
Along with the life insurance sold by TruStage, CUNA Mutual companies also sell multiple other types of insurance, retirement-planning and investment services, and a suite of lending products; all of which are intended for credit unions and their members
When you received that special offer from TruStage (sometimes packaged to appear as though it came directly from the local credit union), it was likely because a credit union provided your contact information to CUNA Mutual.
What the credit union received in exchange for its members’ information isn’t always clear, but you can be reasonably certain that CUNA Mutual companies are providing something of value to gain access to the credit unions’ membership rolls.
CMFG Life Insurance Company
TruStage sells life insurance policies issued and underwritten by CMFG Life Insurance Company, another CUNA-affiliated company. TruStage is essentially a captive agency of CMFG.
And, in that capacity, TruStage’s job is to sell CMFG policies. You can’t get life insurance issued by any other carrier through TruStage.
You can, though, sometimes work with TruStage to get other types of insurance—such as auto coverage. But in that case, TruStage is usually just providing a referral to another CUNA affiliate or an outside company (Liberty Mutual for auto insurance, for instance).
Mutual Company
If you purchase life insurance through TruStage, you are buying into a mutual insurance company. Because they are owned by their policyholders, mutual companies offer some advantages over incorporated, for-profit insurers.
Dividends
One big advantage is that permanent life insurance policies issued by mutual insurers are often eligible for life insurance dividends—a non-guaranteed share of a company’s earnings similar to the dividends corporations sometimes pay to stockholders.
And, similar to credit unions in comparison to banks, mutual companies tend to place more of an emphasis on customer satisfaction than shareholder-owned insurers. That’s just a general trend, though, and not a written-in-stone rule.
A.M. Best Rating
The CUNA family of companies has been around for over 80 years, does business in all 50 states, and has issued life insurance policies covering over 20 million insureds. CMFG currently holds an A (Excellent) rating from A.M. Best.
That’s A.M. Best’s second-highest score and indicates that there is very little risk that CMFG will be financially unable to fulfill its policy obligations anytime in the foreseeable future.
Ethos Life
One last bit of information about TruStage is the agency helps out Ethos Life with certain applicants when Ethos cannot meet their needs with its product issued by Banner Life.
What Types of Insurance Does TruStage Insurance Sell?
While some of the other CUNA member companies offer other forms of insurance, TruStage focuses on no exam life insurance life insurance, particularly simplified-issue policies. In fact, none of TruStage’s available policies require a medical exam. Instead, TruStage’s underwriting relies on a health questionnaire and review of digital medical records.
TruStage offers three basic life insurance policies available for most consumers: renewable term, standard whole life, and guaranteed-acceptance whole life.
TruStage Term Life Insurance:
TruStage’s most popular and heavily marketed offering is its renewable term policy, which lets eligible applicants up to age 69 obtain renewable term coverage with minimal delay.
Coverage levels generally range from $10,000 to $300,000. However, available policy limits are reduced for new applicants age 50 and over.
Crucially, TruStage’s term coverage is a not a standard “level-term” policy like what’s offered by most online life insurance brokers. With a level-term policy, the monthly premiums are set when a policy is issued and remain constant throughout the policy’s entire term.
So, for instance, if you purchase a 20-year level-term policy when you’re 40, your first premium payment will be the same as the premiums you’re paying when you’re 60. If you renew the policy after the term ends, the premiums will increase. But during the policy’s term, premiums are fixed.
Increasing Premiums
That’s not how TruStage’s term coverage works. With a TruStage term policy, you have the right to keep the coverage in place until your 80th birthday, but premiums increase every five years.
So, you pay one monthly amount from ages 30 through 34, followed by a higher amount when you reach 35, and then the premium increases again when you turn 40, and so on until you get to your 80th birthday and can no longer renew the policy for any premium.
According to the rate schedules TruStage publishes on its website, the premium increases are relatively modest until you reach age 50. But, after that, premiums start to go up dramatically so that you’re paying more than double at age 60 the rates you paid at 50.
TruStage’s premium structure can work out OK if you don’t intend to keep the coverage in place later in life. Or, if you do need long-term coverage, TruStage term policies include a conversion option that lets you convert a term policy into whole life.
TruStage Whole Life:
For the most part, TruStage’s standard whole life policy is consistent with the classic whole life model life insurers have been offering since the early Twentieth Century.
You get a death benefit that’s guaranteed to remain effective indefinitely, level premiums for the duration of the policy, and predictable cash-value accumulation. Cash value earns interest at guaranteed rates and can be withdrawn, borrowed against, or cashed out with a policy surrender.
The area in which TruStage whole life differs from many insurers is that TruStage’s policies are simplified-issue. That means that—where many whole life policies require a medical exam—TruStage’s medical screening is limited to a written application and medical records review.
If you’re between ages 18 and 85 and don’t get tripped up by the health history questionnaire, TruStage can get you a CMFG-issued whole life policy with coverage limits of between $5,000 and $100,000.
If there’s something in your health history that stops you from qualifying for standard whole life, TruStage has another option on the table.
TruStage Guaranteed-Acceptance Whole Life:
Guaranteed-acceptance life insurance policies are frequently marketed to older applicants as final-expense insurance.
The policies don’t require any health-related underwriting, so seniors who have the kinds of health issues that tend to come with a long life can still qualify for coverage.
And, because they’re whole life policies, you get a death benefit guaranteed to stay effective regardless of how long you live.
Simplified-issue and guaranteed issue life insurance policies are convenient and can help individuals get coverage who might not otherwise be able to.
But their downside is that less underwriting usually translates into higher premiums.
As a general rule, when an insurance company has less information to evaluate the risk level presented by a given insured, the company will assume the insured is on the higher end of the risk spectrum.
TruStage’s version more or less fits within that mold. And, like with most guaranteed-acceptance policies, TruStage’s guaranteed policy includes a two-year waiting period.
If the insured dies during the initial two years after a policy is issued, the death benefit is equal to the total premiums paid, plus ten percent—except no interest is paid if death results from suicide.
If death occurs during the waiting period but results from a qualifying accident, the policy pays out its full benefits.
TruStage issues guaranteed-acceptance whole life policies to new insureds between ages 45 and 80. Coverage amounts start as low as $2,000 and only go up to $20,000.
How Does TruStage Insurance’s Life Insurance Application Process Work?
Because the policies on offer are either simplified issue or guaranteed acceptance, TruStage is able to keep the application process simple and painless.
An online form is available or, if you prefer, you can call the company and submit the necessary information to a TruStage representative over the phone.
The online application is straight-forward and requires less detailed information than some other online brokers. The form asks for contact and identifying information (name, phone number, address, Social Security Number, etc.), standard demographic, financial, and health-history information, and the identity of the intended beneficiary.
During the application process, you also grant TruStage permission to run a medical background check. This lets TruStage, as part of its underwriting, review prescription histories and similar medical databases.
Before the application is submitted for consideration, you also have to provide a confirmed payment source, such as a bank account or credit card.
TruStage doesn’t charge you at this point, but they ask for the information to ensure applicants are serious about purchasing coverage and have a suitable method to pay the premiums.
Many applicants get approved for coverage right away; others can take up to a week or two to get a decision. In some cases, TruStage’s underwriters need to contact applicants with follow-up questions while the application and medical records are being reviewed.
If approved, coverage kicks in upon TruStage’s receipt of the first premium payment, which the company says usually occurs around 30 days after the application is submitted. After issuance, new policies have a 30-day lookback period during which a policy can be cancelled for a full refund.
What are TruStage Insurance’s Strengths?
Quick, Low-Hassle Coverage:
TruStage lets you get reliable life insurance from a reputable insurer without any burdensome application process or extended underwriting delay. There’s no medical exam, and the online application isn’t overly complicated or confusing.
If personal privacy is a priority, TruStage’s underwriting is less intrusive than many other companies.
The downside of the streamlined application and underwriting is that, because you’re giving the insurance company less data to evaluate its risk, you usually end up paying premiums substantially higher than what would have been available with a fully underwritten policy.
Solid Customer Service:
By all appearances, TruStage and CMFG Life take customer service seriously both before and after policies are issued. TruStage earns an A+ rating from the BBB, and over 3,000 consumer reviews online score the company at just a hair below 5 stars.
Local credit unions tend to value customer satisfaction more than larger financial institutions, so it isn’t surprising that a company that works closely with a big network of credit unions would have a similar outlook.
Simplified-Issue Whole Life:
Most brokers that promise easy online access to life insurance only offer term coverage. Term policies are simpler and therefore require less time and effort from agents during application.
TruStage sells whole life with a simplified application and no medical exam, which is noteworthy. However, this may be a double-edged sword.
Whole life insurance policies tend to work best when they’re tailored to an individual policyholder’s financial situation and objectives. If you hurry through the application process, you might not end up with the ideal policy for your circumstances.
What are TruStage Insurance’s Weaknesses?
No Opportunity for Personalization:
TruStage policies don’t come with any optional riders, and there are only three basic policies to choose from.
If your goal is to get simple final expense coverage or a short-term source of income replacement if disaster strikes—and you’re not looking for anything from a policy beyond a death benefit—TruStage might be able to do the job.
If you want a policy that fits into a larger financial-management or estate-planning structure, you won’t be able to customize a TruStage policy to your individual situation.
No Rate Comparison:
TruStage markets life insurance for CMFG (and CMFG only), and there’s only three policy options to choose from.
If you receive a rate quote, you don’t get to see any other companies’ life insurance rates for comparison.
You can’t even compare what CMFG charges for a similar policy because the TruStage whole life and term life policies are apples-and-oranges.
The problem is that life insurance companies can vary significantly in the premiums they would charge the same insured for the same coverage level. If you choose the wrong company, it can cost you a ton of money in premiums over the life of a policy.
When you work with an independent agent, you can see multiple estimates and better gage whether you’re getting a good deal. TruStage can’t do that for you.
You see one rate—take it or leave it…which brings us to our final point.
High Premiums:
This one really is the elephant in the room. TruStage’s rates are high compared to most other companies.
If you do a side-by-side comparison of TruStage’s rate schedule to preliminary estimates from other brokers based on a similarly situated insured, TruStage’s rates are higher. And not just a little higher.
Part of that has to do with increased insurer risk due to the simplified application. But most of it is just that the premiums are high.
The whole life rates are a little more competitive with other simplified and guaranteed-issue whole life policies.
But the term rates are just plain more expensive than comparable policies.
And, if you buy a term policy from TruStage, you can’t even get level premiums for more than five years. So, the premiums start out higher and, every five years, they go up.
Conclusion
Chances are you can do better than TruStage. If you are considering a policy through the company, why not see what we can find for you as well. Then simply go with the company you believe offers the best product for you, based on your unique needs and goals.
