Travelers Life Insurance Company Review

Although one of the largest and most respected insurance companies in the United States, with offices in all 50 states and overseas, Travelers has not been a life insurance company for several years. Life insurance is available through some of its formerly affiliated companies, however.

Travelers Indemnity Company and other affiliated companies collectively hold an A+ rating from A. M. Best for financial strength. Other ratings include an AA from Fitch, an Aa2 from Moody’s and an AA- from Standard and Poor’s. Some affiliated companies are rated separately, but no Travelers company holds worse than an A- rating from A. M. Best.

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History and Structure

Travelers was founded as the Travelers Insurance Company in 1864 in Hartford, Connecticut as literally an insurance company for travelers. The original scope of the company was “for the purpose of insuring travelers against the lost of life or personal injury while journeying by railway or steamboat.” Travelers became a general accident insurer two years later. The company quickly became known as an innovator, offering some of the first worker’s compensation policies in 1889. The world’s first auto insurance policy, issued in 1897, was underwritten by Travelers.

Travelers was bought out in 1993 by Primerica, a financial services company founded in 1977 by Georgia businessman Arthur L. Williams, Jr. The resulting company was named Travelers Inc. with Primerica as a subsidiary.

In 1998, Travelers merged with the major New York City bank Citicorp to form Citigroup. However the business relationship between the banking and insurance interests did not go as well as planned, especially after the September 11, 2001, terrorist attacks. In 2002, the Travelers property-casualty business was spun off of Citigroup, with the parent company retaining the Travelers life insurance business and Primerica subsidiary.

In 2005 Citigroup sold the Travelers life insurance business to MetLife, effectively ending Travelers Life Insurance century-old presence. Primerica was itself spun off of Citigroup in 2010, although Citigroup retains a minority interest in the company.

In 2004, the spun off Travelers merged with the major Minnesota-based insurer The St. Paul. The company re-acquired the rights to its familiar red umbrella logo from Citigroup in 2007. In 2009, Travelers became the only insurance company in the Dow Jones Industrial Average by replacing its former parent company Citigroup on the stock index.

Term Life

The following product discussions are intended to be a generic representation of the policies Travelers Life Insurance offers. Not all products may be available in every state as described. In addition policy features and underwriting requirements may change without notice. Consult with a Travelers Life Insurance agent for the most up-to-date information.

Although Travelers no longer sells life insurance, its former subsidiary Primerica still does. Based in Duluth, Georgia, Primerica is a company that subscribes to the “buy term and invest the difference” philosophy. Consequently, it only sells term life insurance. The Primerica term product is available in terms ranging from 10 to 35 years. The accelerated death benefit is included in every policy. The policies are renewable after the term as well.

Primerica is noted for its aggressive recruiting of agents, many of whom work only part time. Agents are in turn encouraged to recruit others to be agents as well. This practice has resulted in rather high turnover and has been criticized as being akin to a multi-level marketing plan. However, Primerica can counter with an A+ rating from A. M. Best and a generally good reputation for its products.

Whole Life

Thanks to the 2005 sale of the former Travelers Life Insurance by Citigroup and Primerica’s term-only philosophy, MetLife is the sole successor to Travelers permanent life insurance portfolio and heritage. The New York City-based MetLife is the largest single life insurance issuer in the United States, with well over $3 trillion in life insurance currently in force.

MetLife’s whole life insurance product features a fixed cash value mechanism and the standard suite of optional riders one would expect in a whole life insurance product including waiver of premium and nonguaranteed dividend options. However, MetLife whole life insurance products also feature guaranteed insurability riders for both additional life insurance and long-term care (LTC) insurance.

Universal Life

As with whole life, MetLife is only place where one can buy what were formerly Travelers Life Insurance UL and VUL products. The MetLife UL is available in both guaranteed protection and cash accumulation models. The difference is primarily in how the cash value mechanisms are set up. Available riders include waiver of premium, LTC guaranteed insurability, and a death benefit paid in a similar manner as an annuity as opposed to a lump sum.

The MetLife VUL policies are formulated in a similar manner. As with all VUL policies, the cash value mechanisms are funded by separate accounts similar to mutual funds. While VUL policies historically outperform fixed policies over time, they are subject to market risk and can lose money. MetLife offers over 60 separate accounts to choose from, ranging from conservative to aggressive portfolios.

MetLife also offers a two-party survivorship UL policy. This policy is available in traditional payment formats or in a single-premium variety. In the event of divorce or other separation, the policy can be split into two separate life insurance policies.

Annuities and Other Products

Since Travelers is no longer a life insurance company, by definition it can no longer sell annuities. Among Travelers Life Insurance successor companies still in the life insurance business, only MetLife offers fixed annuity products. However, both MetLife and Primerica offer variable annuities, long-term care insurance and mutual funds.

MetLife offers the standard range of fixed and variable annuities in both qualified and non-qualified versions. It also offers what it calls an “income annuity,” which is effectively an annuity with no accumulation phase. The income annuity is available as immediate annuity that begins its distribution phase right away, or as a deferred annuity which begins distributions at a later date.

Primerica offers a variable annuity underwritten by MetLife. Its LTC product is offered through Genworth Financial. Mutual fund investments through Primerica are available through American Funds, Invesco, Franklin Templeton, Legg Mason and Pioneer Investments.

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