MassMutual Will Offer $1 Billion In Free Life Insurance To Poor Parents
Massachusetts Mutual Life Insurance Company, Springfield, Mass., is setting up a free life insurance program to protect the ability of children of low-income workers to attend college.
Under the program, which it calls LifeBridge, MassMutual says it will award up to 20,000 term life policies with $50,000 death benefits to qualified working parents, for a total face value of $1 billion. MassMutual says it will pay the premiums for each policy for up to 10 years.
If an insured parent dies during the 10-year term, MassMutual will pay the death benefit to a trust established for the children named as beneficiaries. The trust will use the cash solely to pay for tuition, books and other school expenses.
MassMutual expects the program to last for five years. It will be available through four nonprofit groups in Connecticut, Massachusetts, New Jersey and North Carolina initially and expanded to the rest of the nation next year, MassMutual says.
Robert J. OConnell, chairman, president and CEO of MassMutual, says LifeBridge grew out of conversations he had with several company executives earlier this year.
“I challenged a couple of our people to see if we could come up with a program to make life insurance available” to poor working parents, he explains.
OConnell points to an American Council of Life Insurers survey that found that low-income parents worry more about the need for life insurance than any other economic group, but also have the least amount of it.
Offering free insurance to those who cant afford it “reinforces the idea that life insurance is an extraordinarily valuable asset,” he says.
He estimates the program will cost the company “many millions of dollars” by the time the last policy expires.