Common myths about life insurance include: it’s too expensive; it’s too hard to qualify for; and the only people who really need it are those who can afford to leave an inheritance.
Straight answers to seven common questions about life insurance.
Common myths about life insurance include: it’s too expensive; it’s too hard to qualify for; and the only people who really need it are those who can afford to leave an inheritance. The truth is that insurance companies today offer affordable options that don’t require any medical exams or health questions to qualify. And no matter what your income or savings, final expenses are inevitable: costs such as funeral expenses, medical bills, credit cards, and other debts.
Here are some of the most commonly asked questions about one of those affordable options: Guaranteed Acceptance Life Insurance from MassMutual.
1. Why do you need Guaranteed Acceptance Life Insurance?
Consider the following facts, and the need for life insurance becomes clearer:
• In 2015, the average funeral cost alone was about $8,500 (*1). Even a simple cremation without a funeral service can cost more than $1,000 (*2).
• Social Security pays a lump sum of only $255 for funeral expenses (*3). —if your surviving spouse or child meets certain requirements.
• Seventy-five percent of older American households spent $10,000 or more(*4). on end-of-life medical bills.
• Medicare covers only 60% of out-of-pocket healthcare costs (*4).
Someone has to cover these costs—and without life insurance, the burden could fall upon family members or loved ones.
Of course, no one wants to think about final expenses—but it’s important to prepare for them now, to help make sure that yours will be covered. Knowing that final arrangements are taken care of can provide peace of mind today. Even if you can’t afford to cover all of your final expenses, whatever you can do now will help in the future.
2. How much coverage do you need?
That depends on your financial situation—everyone is different. To make sure you have enough insurance to cover final expenses, total all of your debts and then add an estimated cost for funeral expenses. This figure will be your target amount for life insurance coverage to help protect your family against final expenses.
Then, to see what your monthly premium would be for the amount of coverage you need, click here to see the current rate chart for MassMutual Guaranteed Acceptance Life Insurance. Your actual rate depends on your age, gender, and the amount of coverage you need.
3. Who should you purchase it from?
It’s important to choose a company that’s known and trusted, with a track record of financial strength and stability. It only takes a little effort to look into a company’s history and financial ratings to give you a lot of confidence in the choice you make. Look for companies with long histories and high ratings from trusted sources.
For example, MassMutual receives very high financial strength scores from top financial ratings organizations (*5):
A.M. Best Company: “Superior”
Fitch Ratings: “Very Strong”
Moody’s Investors Service: “Excellent”
Standard & Poor’s: “Very Strong”
Once you’ve identified trusted sources of life insurance coverage, contact them and get a feel for their customer service—because while terms and conditions may be similar among top companies, often it’s service and commitment to customers that makes the difference. Select a company that is easy to work with, takes the time to answer your questions, addresses your concerns, and puts your needs first.
4. How quickly will your coverage take effect?
Most guaranteed acceptance life insurance policies limit the amount of the death benefit for a period of time, after which full benefits are in force. In the case of MassMutual Guaranteed Acceptance Life Insurance, the death benefit for the first two years is equal to the money you’ve paid into the policy, plus 10%. After two years of premium payments, the full coverage amount of the policy will be paid to your beneficiaries.
5. Will changes in your age or health status affect your payments and coverage?
With Guaranteed Acceptance Life Insurance from MassMutual, your coverage will never decrease—and your payments will never increase, regardless of your age or health status. As long as you continue to pay your premiums, you’ll be covered for life.
There are many different kinds of life insurance policies, and this feature differs greatly from policy to policy, so make sure to check the specifics on the one you’re considering with your agent before you purchase.
6. What if, after you get the policy, you’re not sure it’s right for you?
Canceling life insurance is an important decision that shouldn’t be taken lightly. First, remember the reason you took it out in the first place: to help your loved ones avoid the burden of final expenses. If it’s simply a matter of buyer’s remorse, and you feel like the policy or the company isn’t the right fit, don’t let too much time pass before replacing your coverage, so your family will have this important protection.
With many life insurance policies—including MassMutual Guaranteed Acceptance Life Insurance—you can cancel for any reason within 30 days of purchase, with no charge or penalty. To check the terms and conditions of your coverage, when you receive your policy, make sure to carefully read all of the enclosed materials.
After the 30-day period, you should be able to contact the company you purchased it from and inform them that you wish to cancel. At that point, you’ll simply stop paying your monthly premiums, and the coverage will no longer apply. If you pay your premiums through automatic deductions from your bank account, make sure to contact your bank to cancel the withdrawals. You won’t be able to receive a refund of premium payments, but you shouldn’t have to pay any additional charges to cancel.
7. If you still have questions, where can you turn for straight answers? You can discuss your situation with a MassMutual life insurance specialist, confidentially and with no obligation. MassMutual offers many different kinds of life insurance to match your needs and budget, so you can get the confidence of knowing you’re covered. To learn more, visit ExploreMassMutual.com or call 800-828-7709.
*1 National Funeral Directors Association General Price List Survey, 2015.
*2 National Funeral Directors Association, 2014.
*3 Social Security Administration, https://www.ssa.gov/planners/survivors/ifyou7.html.
*4 “Out-of-Pocket Spending in the Last Five Years of Life,” Journal of General Internal Medicine, 2012.
*5 Ratings as of 5/1/2016. Ratings apply to Massachusetts Mutual Life Insurance Company and its subsidiaries, C.M. Life Insurance Company and MML Bay State Life Insurance Company. Ratings are subject to change.
Some restrictions apply. Benefits are limited in the first two policy years. This is not a funeral or burial contract. The policy’s death benefit will be paid to your designated beneficiaries. The policy does not guarantee that the death benefit will be sufficient to pay for any particular goods or services, nor that those goods or services will be provided by any particular provider.
Guaranteed Acceptance Life Insurance (GALI) (Policy Form NY-GIWL2112PMM) is a level premium, non-participating permanent life insurance policy and is issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001, in New York. GALI (Policy Form GIWL2112PCM, ICC15-GIWL2112PCM and ICC15-GIWL2112PCM in North Carolina) is issued in all other states and the District of Columbia by C.M. Life Insurance Company, Enfield, CT 06082, a wholly owned subsidiary of MassMutual. This product is not yet approved in all states. State variations may apply. Agency services provided by TZ Insurance Solutions; AR license #0100104637, CA license #0H02337.
©2016 Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001. All rights reserved. www.massmutual.com CRN201807-203757