Filed under: Professional Profiles, Personal Finance, News, Lynnette Khalfani-Cox
![Free Life Insurance for College Expenses]()
All parents worry about their children -- about their personal happiness, providing a good education for them, and of course, about their financial futures. For low-income parents and single parents in particular, financial worries can loom especially large.
That's why I was pleasantly surprised to recently come across an offer for
free life insurance for parents earning $40,000 or less who also have children under the age of 18. The life insurance offered is a $50,000 term-life insurance policy, and it covers the higher education expenses of your kids in the event of your death. If you pass away, the $50,000 gets paid directly to the school your kid is attending, to pay for things like tuition, books, fees and educational supplies.
I know, I know. It sounds too good to be true. But it isn't. This offer comes compliments of a well-known and respected mutual life insurance company,
MassMutual, which has been around for 160 years and is based in Springfield, Massachusetts. So far, more than 11,500 people nationwide have received $575 million worth of free life insurance as part of MassMutual's LifeBridge Free Life Insurance Program.
Here's how it works.
Under the program, MassMutual pays all the insurance premiums for a $50,000, 10-year term life insurance policy. That insurance policy gets issued to a trust at no cost to the insured individual. But if an insured parent or legal guardian passes away while the policy is in force, the trust pays $50,000 in educational costs for the deceased person's children. And your children have up to 10 years after your death, or until age 35 (whichever is later) to use this educational benefit.
To
qualify for the insurance, you have to meet these criteria:
-You must be between the ages of 19 and 42.
-You must be the parent or legal guardian of one or more dependent children under the age of 18.
-You must be a permanent, legal resident of the U.S.
-You must be employed full or part-time and earning between $10,000 and $40,000 annually.
-You must be the only parent or legal guardian in your household who has applied for the insurance; and,
-You must be in good health as determined by MassMutual's underwriting guidelines.
Apparently, the program is proving popular, especially among workers at government agencies. For example, in Fulton County, Georgia, 60 employees in the Fulton County Defined Contribution 401(a) Plan have each signed up for the free life insurance, garnering a total of $3 million in free coverage from MassMutual.
Interestingly, you don't have to participate in a retirement plan administered by MassMutual or be a client of MassMutual's to apply.
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Insurance Protection Against Disasters
Family Grave Markers
If a grave monument on a family plot has been vandalized or otherwise damaged, such as struck by lightning, it may be covered, depending on your insurance company. Many companies provide up to $5,000 for damage to a grave marker, including headstones, monuments and urns, according to III. However, policies generally exclude damage resulting from a catastrophe, such as a hurricane. There's no additional charge for this coverage.
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Insurance Protection Against Disasters
Your Drunk Friends
If you've just hosted a rollicking party but one of your guests left drunk and caused an accident, the finger of blame could point at you. In most states, you can be held responsible for his actions and find yourself in court. If a civil claim is filed against you, your home insurance pays for your legal representation and any damages the court awards -- up to the limits of your policy. It's important to have adequate liability coverage. Most insurance agents recommend buying liability coverage between $300,000 and $500,000.
Insurance Protection Against Disasters
Family Grave Markers
If a grave monument on a family plot has been vandalized or otherwise damaged, such as struck by lightning, it may be covered, depending on your insurance company. Many companies provide up to $5,000 for damage to a grave marker, including headstones, monuments and urns, according to III. However, policies generally exclude damage resulting from a catastrophe, such as a hurricane. There's no additional charge for this coverage.
Insurance Protection Against Disasters
Your Naughty Dog
Say your normally mild-mannered tail-wagger has a bad day. One of your neighbor's children wants to play but your pooch isn't in the mood and responds negatively. The bite causes the child an injury that requires hospitalization. Your neighbor sues you, seeking reimbursement for the child's medical bills. Depending on what breed of dog you own, where you live and your insurance company, home insurance may have you covered. Some home insurers have lists of breeds and crossbreeds they will not insure; other insurers consider such breeds on a case-by-case basis, or charge more for certain "biting" breeds such as pit bulls. Check your policy or call to see if you have coverage.
Insurance Protection Against Disasters
Stolen Gifts
We've all stashed purchases in our car in a mall parking lot and gone back in for more shopping. But car insurance does not cover personal possessions that are stolen from your vehicle. Fortunately, theft of personal property is covered under your home insurance. You'll need to file a police report and pay a deductible to make a theft-related insurance claim. If your receipts are stolen along with your gifts, you will need to document your purchases, perhaps by obtaining duplicate receipts from the stores.
Insurance Protection Against Disasters
Flat Tires, Lock Outs and More
A number of things can go wrong with your car. Maybe you hit a pothole on your way to work and suffer a flat tire. Perhaps you mindlessly locked your keys inside your car. It's possible that your gas gauge malfunctioned and you ran out of gas. If you added roadside assistance coverage to your car insurance policy, you're covered for most of these things. For example, Progressive's Emergency Roadside Assistance coverage includes towing, flat-tire changes, battery jumpstarts, emergency fuel and fluid delivery and locksmith service. Roadside assistance coverage is optional and relatively cheap.
Insurance Protection Against Disasters
Those Reckless Friends
If you loan your car to a friend for a few hours and he crashes it, your own insurance policy will come to your rescue. (It doesn't matter whether or not your friend is insured, because your policy kicks in on your car.) Your policy insures your vehicle plus "you, any relative and anyone else using your car if the use is with your permission." Even if your friend has his own car insurance, your insurance will pay for damage caused to others and, if you carry collision insurance, for damage to your car. However, you'll have to pay your deductible for any collision claim.
Insurance Protection Against Disasters
Bad Checks, Fake Cash and Other Fraud
If someone writes you a bogus check, your credit card is stolen or you unknowingly accepted counterfeit cash, you could be covered. According to the Insurance Information Institute (III), home insurance coverage can include unauthorized use of credit cards, forged checks and counterfeit cash. However, policy limits are generally very low, such as $500.
Insurance Protection Against Disasters
Your Stolen Gun
Say your teen invites a few friends to your home and later you discover that your .40 caliber semiautomatic handgun is missing. You would report the theft and your home insurance will likely cover it. Most standard policies cover theft of firearms for up to $1,500. If you own an extensive collection of guns, consider purchasing extra coverage.
Insurance Protection Against Disasters
Your Child's College Dorm Room
If a thief robs your child's college dorm, your home insurance policy should have you covered. Most home insurance policies will extend coverage to theft of personal belongings in your child's dorm. However, coverage does not extend to an off-campus apartment rented by your child; for that you'll need renter's insurance. Also, your child must be a full-time student and be considered your dependent for coverage to apply.
Insurance Protection Against Disasters
Terrorism
Hopefully, it will never, ever happen, but in the unlikely event that a terrorist group bombs your neighborhood, your property is covered under both your home and car insurance policies. Standard homeowners insurance policies include coverage for damage to property and personal possessions resulting from an act of terrorism. If your car is damaged or destroyed in a terrorist attack, your car insurance policy will cover the damage if you have purchased comprehensive coverage. But if you carry only liability coverage, your car would not be covered.
While terrorism is covered, acts of war are excluded. After an attack, the government would declare whether it is terrorism or war and your insurance will respond accordingly. Note that biological and nuclear attacks are not covered.
Insurance Protection Against Disasters
"MassMutual offers this great program, not just to its retirement plan clients, but to any working parent in the country who qualifies. Our MassMutual retirement plan relationship manager made us aware of this program and we're thrilled that so many of our employees have been able to take advantage of it,"
says Tammy Goebeler, Investment Officer of Fulton County. "As a parent, you want the best education possible for your children. This program can give a parent peace of mind in the event that something unexpected happens."
If you're like me, you may be wondering how MassMutual can afford to do this, and maybe even
why they're doing it. Well, I'm no actuarial. But I have to imagine that the odds are in MassMutual's favor that they won't have to pay a lot of claims. For one thing, by keeping the age range for eligible applicants confined to between 19 and 42, that limits the company's exposure. After all, someone in their 20's, 30's or early 40's is statistically far less likely to pass away than someone in, say, their 60's, 70's or early 80's.
Additionally, the 10-year limit on this term policy means that MassMutual won't bear the risk forever of having to pay out claims.
Finally, they do require you to be in good health, making it far less likely that policy holders will be stricken with some kind of fatal illness or disease during the decade that the policy is in force.
Still, in an era where so many financial institutions seem to care about only one thing -- making money -- it's refreshing to see this insurance company offering something free of charge that can be a huge benefit to a family in need.
As for the "why" question, MassMutual is offering this freebie as part of the company's community programs and charitable donations initiative. MassMutual has even set a big community responsibility goal for the program: the insurer says it intends to give away $1 billion in free insurance coverage. It's already more than halfway toward reaching that goal.
To learn more about the LifeBridge Free Life Insurance Program or to apply for this coverage, call (800) 272-2216 or visit
www.massmutual.com/lifebridge.
Having life insurance is always a good idea when you have minor children. But for those who qualify, getting insurance coverage at no cost is an even sweeter deal.
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Lynnette Khalfani-Cox, an award-winning financial news journalist and former Wall Street Journal reporter for CNBC, has been featured in the Washington Post, USA Today, and the New York Times, as well as magazines ranging from Essence and Redbook to Black Enterprise and Smart Money. Check out her New York Times best seller
'Zero Debt: The Ultimate Guide to Financial Freedom.'
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Lynnette Khalfani-Cox, 
Her life has been filled with seemingly insurmountable odds -- poor, pregnant by age 14, molested by relatives. It is often said that what doesn't kill you makes you stronger and as a testament to this saying, Winfrey has excelled as a media mogul, branding herself in film, TV, publishing, and radio.
Rebecca Brody is a relationship coach and columnist in NYC. She hosts 
