Posted on: Thursday, June 16, 2005

THE COLOR OF MONEY
Free life insurance for poor is real deal

By Michelle Singletary

WASHINGTON — You've probably heard that nothing in life is free. But sometimes you can get something for nothing.

For example, MassMutual Financial Group, one of the nation's largest life insurance companies, is actually offering something free to low-income working parents.

Under its LifeBridge program, MassMutual is writing term life policies at no cost for people earning $40,000 or less. The company has promised to pay the premiums nationally for 20,000 policies, each with a $50,000 death benefit.

Each LifeBridge policy has a 10-year term. If the insured parent or legal guardian dies during that time, the $50,000 benefit will be applied toward the education of the children named as beneficiaries. The money is put in a trust administered by the MassMutual Trust Company, which will pay the educational expenses directly to the institution the children attend.

Various types of schools qualify, including preschools, private schools, vocational schools, community colleges, universities and graduate schools. Some of the educational expenses covered include books and tuition.

LifeBridge was introduced in September 2002 and has been rolled out on a state-by-state basis. It is currently available in 46 states plus the District of Columbia and not available in New Mexico, West Virginia, Maine or South Dakota. The company is working on approval in those states, according to Mark Di Giorgio, director of public relations for MassMutual.

So far MassMutual has written 3,650 policies. It hopes to issue 20,000 by Dec. 31, 2007.

I wondered why the policies haven't been snapped up by the many low-income families who don't have life insurance.

"This is a population of people who are accustomed to bait-and-switch schemes," Di Giorgio said. "They are accustomed to people offering one thing and giving them another. Many free offers are burdened with small type."

You should be skeptical about free offers. But in this case, there's nothing to lose. Even though the policies are just for 10 years and $50,000, it's better than no insurance at all.

"There is no small type in this offer," Di Giorgio said. "This is an absolutely, 100 percent free offer."

Di Giorgio said LifeBridge is part of MassMutual's effort to merge its philanthropic efforts in education with providing insurance to low-income families. With no advertising budget, Di Giorgio said the company has been relying on community and nonprofit groups to get the word out about the program.

To be eligible, applicants must be:

• Between ages 19 and 42.

• Permanent, legal U.S. residents.

• The parents or legal guardians of one or more dependent children under 18.

• Currently employed and have a family income between $10,000 and $40,000 on their most recent income tax return.

• In good health, as determined by MassMutual's underwriting guidelines.

Potential policy holders also must provide a copy of their last federal 1040 or 1040A, last pay stub, Social Security numbers for their children or dependents and proper identification, such as a driver's license.

If you're interested or know someone who could benefit, call MassMutual toll-free at (800) 272-2216.

Michelle Singletary writes for The Washington Post