Mass Mutual Life Insurance Company Review
Mass Mutual Life Insurance, officially known as Massachusetts Mutual Life Insurance Company and often styled by the company as “MassMutual” (no space), is one of the oldest and largest mutual life insurance companies in the United States. A pioneer in whole life insurance, Mass Mutual has a history of financial strength matched by few of its competitors.
Mass Mutual Life Insurance holds the A++ rating from A. M. Best. While in many ways considered equal to the more common A+ rating, this top “superior” rating in security is reserved only for particularly well-capitalized insurance companies. Other ratings held by Mass Mutual include AA+ from Fitch (very strong), Aa2 from Moody’s (excellent) and AA+ from Standard and Poor’s (very strong). These ratings all rank within the top three ratings available from their respective agencies.
History And Structure
Mass Mutual Life Insurance was founded in 1851 in Springfield, Massachusetts, and maintains is corporate headquarters there to this day. It was founded as a stock insurance company with the intent of mutualizing itself at a later date in order to comply with a Massachusetts state law of the time which required insurance companies to raise capital at startup. The company has been fully mutual since 1867.
Although initially a regional company in New England, Mass Mutual Life Insurance grew quickly and by 1868 had offices in New York City, Detroit, Cleveland, Chicago and San Francisco, beating the Transcontinental Railroad to the west coast. In 1901 Mass Mutual became the first company to introduce premium installments paid over a fixed period or for life depending on the product, an innovation that today is a central component of most life insurance policies.
Today most of Mass Mutual Life Insurance’s staff works at the Springfield headquarters or in nearby Enfield, Connecticut. The company employs a captive agency force through its general agent program. Mass Mutual’s companies operate as subsidiaries of MassMutual Financial Group and include the original Massachusetts Mutual Life Insurance Company, the company’s broker/dealer MML Investors Services, Inc., and the Oppenheimer Funds wealth management company, which was acquired in 1990.
The following product discussions are intended to be a generic representation of the policies Mass Mutual 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 Mass Mutual Life Insurance agent for the most up-to-date information.
Mass Mutual’s term life insurance products are pretty standard for the industry. It issues policies with terms as short as one year and typically goes up to 30 years depending on underwriting requirements. Most of Mass Mutual Life Insurance term life policies are convertible, meaning they can be converted into a permanent life product without additional underwriting provided certain criteria are met.
Through its LifeBridge charitable program, in the past Mass Mutual has offered free 10-year, $50,000 face value term policies to working parents who otherwise could not afford a life insurance policy. The death benefit on these policies is designed to pay for a child’s education in the event of the parent’s death.
Whole life insurance has been Mass Mutual Life Insurance’s flagship product for most of its history. While other insurance companies have emphasized universal life in their permanent life insurance portfolios since it became popular in the 1980s – some even to the point of discontinuing whole life entirely – Mass Mutual remains committed to the whole life product. In its marketing Mass Mutual places a heavy emphasis on the permanent nature of whole life insurance, asking “Why rent when you can own?”
Mass Mutual Life Insurance has maintained a longstanding policy of discouraging (but not prohibiting) policy loans on whole life insurance cash value in favor of dividends, or earnings on cash value in excess of the expenses required to keep the policy in force. Mass Mutual has an impeccable track record with its whole life dividends, paying them out every year for nearly 140 years. Mass Mutual policyholders can elect to have these dividends used to pay future premiums, buy additional whole or term life insurance, reinvested into the cash value to accrue additional interest or repay prior policy loans. The policyholder may change his or her dividend option at any time.
Mass Mutual whole life policies are available in the traditional fixed whole life policy variant as well as in a variable whole life product, such as its Variable Life Plus brand. Cash value on the variable whole life products is based on performance in separate accounts which work similar to mutual funds. Most of the available funds on the Variable Life Plus account are through Mass Mutual Life Insurance’s subsidiary, Oppenheimer Funds, although third-party funds are available. More conservative separate accounts such as bond- and money market-based funds are offered through Mass Mutual-controlled MML management.
The company’s emphasis on whole life notwithstanding, Mass Mutual Life Insurance doesn’t neglect the newer variant of permanent life insurance, universal life. Indeed, the company offers a full range of universal life policies and is quite experienced in the product line. Mass Mutual offered its first UL policy in 1981, only a couple years after the product was first conceived and marketed.
As with its whole life, Mass Mutual Life Insurance offers universal life insurance in the traditional fixed universal life (UL) and the variable universal life (VUL) variants. Several of Mass Mutual’s VUL products are available in survivorship formats, covering two people.
Annuities And Other Products
Mass Mutual Life Insurance offers annuities in both fixed and variable formats as well as in qualified and non-qualified plans. However several of their annuity products have been discontinued, although the company continues to service its discontinued products already in force. Oppenheimer Funds offers similar qualified plans in the form of IRAs, but since Oppenheimer is not a life insurance company their products are not considered annuities.
Mass Mutual Life insurance is a major player in the disability insurance (DI) and long-term care markets (LTC). Disability insurance pays all or part of one’s income if he or she is diagnosed as disabled either temporarily or permanently. DI policies can be purchased by individuals, but is more commonly offered as an employment benefit.
Long-term care policies cover the costs of an individual who requires a lengthy stay in a nursing home or other care facility. While commonly associated with senior citizens, LTC policies cover younger individuals as well in qualifying scenarios. These policies are particularly beneficial in instances where such stays are not due to terminal illness and therefore the insured wouldn’t qualify for any life insurance accelerated benefit rider benefits. They can also be an attractive substitute to divesting one’s assets in order to qualify for Medicaid.
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