A Guide to Life Insurance in Massachusetts (MA)

When looking into securing Massachusetts Life Insurance Quotes it is important to think not only about life insurance in general, but also about how life insurance in Massachusetts is specifically dealt with.

The reason for this is that different states have different rules when it comes to the way that they treat life insurance, and so it is useful to know a little more about the specifics of how it is dealt with on a state by state basis.

 

Massachusetts – The Background…

Massachusetts is one of the smallest states in the union (44th in terms of size), but punches well-above its weight in terms of population with a population of 6,547,629 in 2010 (according to the US Census), and a population density that sees it as the 3rd most densely populated State in the US behind Rhode Island in 2nd, and New Jersey in 1st.

To get it in perspective, Massachusetts on average has 839 people for every square mile, whilst Wyoming has about 6! (And Alaska just 1). In fact, over half of the states in the United States have population densities of under 100 people per square mile which is far less than most other countries (Germany is 593 and England is 1,023).

The Capital City (and also the largest city) in Massachusetts is Boston, which had an estimated population of 645,169 people, and a metropolitan area that is home to some four and a half million people. 

The Boston Tea Party occurred on the 16th December 1773 as a culmination of unease between the then colonists and the British Parliament about the Tea Act, and was a pivotal moment in kick-starting the American Revolution.

The rich history of Boston makes it a favourite destination for tourists, and over 20 million people visit every year.

 

Massachusetts Life Insurance – The Facts…

The gross state product of Massachusetts in 2010 was $378 billion, the 12th highest in the nation, and amounting to 2.6% of the United States total GDP.

The insurance sector is extremely strong in Massachusetts, with the Liberty Mutual Insurance Group (one of the Fortune 500) for example, being located in the State (though most of their business is other types of insurance, not life insurance)

(You can see a financial statement for Liberty Mutual Insurance Group in Massachusetts here -

https://eapps.naic.org/cis/financialReport.do?entityId=3771 )

And in total there are 403 Life Insurance Companies in Massachusetts who are licenced to sell life insurance, of whom 16 are actually domiciled in the State.

Over 28,000 people are directly employed by Massachusetts Life Insurance Companies, with a further 41,000 non-insurance jobs depending on the life insurance sector for financing, real estate, mortgages etc.

A closer look at the figures that underpin the life insurance industry in Massachusetts reveal that residents of Massachusetts have over $790 billion in total death benefit cover, and that there are over 3 million Massachusetts individual life insurance policies that each hold an average amount of cover of $170,000 per policy holder, according to the American Council of Life Insurers.

And if you take a wider look at the payouts from Massachusetts Life Insurance, then it also becomes clearer why it is so important, as in 2009 over $10 billion in death benefits, surrender values, policy dividends and matured endowments was paid out to residents of The Bay State by the Massachusetts Life Insurance Companies.

 

Massachusetts Life Insurance – The Four Main Ways To Assess How Much Massachusetts Life Insurance You REALLY Need!

1/ Immediate Needs…

First you should consider what the immediate needs of your dependants might be at the time of your death. This could include such factors as:

  • Funeral expenses
  • Bills that they may have accumulated if you were sick or in hospital.
  • Estate taxes

2/ Re-Adjustment Needs…

Secondly, you should consider what expenses they will have just after that initial period that will allow them to adjust to the new circumstances calmly. This could include such factors as:

  • Moving expenses (say if they no longer want to live in the same place, or want to move to live nearer to other family members)
  • Job change – If they now have young children to look after then keeping the same job may be impossible, so they need to find a new one that offers more convenience.


3/ On-going Needs…

Thirdly, there are the on-going needs which would perhaps have been paid by you if you had been there, but which now need to be paid in some way. This could include such factors as:

  • Bills and expenses
  • Paying off debts or credit cards
  • Day care costs for children or elderly relatives
  • College Tuition
  • Retirement costs say for a spouse
  • Supporting your elderly parent


4/ Make a Difference Needs…

Fourthly, there are needs that whilst they would not be classed as ‘essential’ (and could in fact be skipped entirely from a purely financial perspective). There are needs which are dreams or goals that you would have liked to have done if you were alive, but which your death will have stopped, and so you may like to make some provision for these with your life insurance. These could include such items as:

  • Money needed to help rebuild or re-decorate your church
  • A charity project you regularly support
  • An animal charity that you supported



The first three of these are essential to consider when thinking about how much life insurance you really need when getting some Massachusetts Life Insurance Quotes. But once you have given the matter some more thought, you may also find a few items that may come under ‘Making A Difference’ which you feel passionate enough about that you still want to support, even in death.

Regardless, get out a piece of paper or a spreadsheet, and start to calculate some firm figures about how much life insurance you really need.


Massachusetts Life Insurance – The Details…

Massachusetts Insurance is regulated based on The State Insurance Code of Massachusetts, which lays down the regulatory umbrella under which insurance consumers in Massachusetts are sheltered.

It also sets down the responsibilities (such as telling the truth on the application form, paying your insurance premiums etc.) that the consumers have to insurance companies in Massachusetts, and what they can expect in return.

You can find a list of Massachusetts Insurance Codes here:

http://www.lawlib.state.ma.us/source/mass/cmr/211cmr.html

 

Massachusetts Life Insurance – Resources…

Massachusetts Division of Insurance

The Massachusetts Insurance Division looks after the regulation of all types of insurance in Massachusetts.

They list their mission as being: “The primary mission of the Division of Insurance is to monitor the solvency of its licensees in order to promote a healthy, responsive and willing marketplace for consumers who purchase insurance products.”

http://www.mass.gov/doi

 

Massachusetts Life Insurance Information

The Massachusetts Division of Insurance website is not very well designed in terms of people actually linking to their webpages (hence the long url below!) But some of the information is quite good.

Here are some resources that they offer consumer for Massachusetts Life Insurance.

http://www.mass.gov/ocabr/consumer/insurance/life-insurance/

 

Massachusetts Life Insurance Company Ratings

If you are looking to check out the financial status of an insurance company in Massachusetts, then it is a good idea to have a look at AM Bests “Company and Ratings Search”.

You can find it here:

http://www3.ambest.com/ratings/advanced.asp

 

Massachusetts Life & Health Insurance Guaranty Association

If there is an insolvency in an insurance company in Massachusetts that sells life insurance, then the Massachusetts Life and Health Insurance Guaranty Association will step in to provide some statutory protection for Life Insurance Policy Holders in Massachusetts.

http://www.malifega.org/



 

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