Free Life Insurance: Who Qualifies And How To Get It?

Life insurance is a contract in which a policyholder pays premiums in exchange for a lump-sum death benefit that is paid to the policyholder's beneficiaries when they pass away. While life insurance is not free, there are some free options available, such as MassMutual's LifeBridge plan, which provides a no-cost $50,000, 10-year term life insurance policy to individuals and families making between $10,000 and $40,000 per year. However, there are certain qualifications that need to be met for this type of policy. Additionally, there are low-cost life insurance options available, with some policies costing as little as $16 or $20 per month. The cost of life insurance depends on several factors, including age, medical history, and lifestyle.

No-cost life insurance

While it is true that nothing in life is free, there are some no-cost life insurance policies available. These policies are usually short-lived, but there is one notable exception: MassMutual's LifeBridge plan. This plan provides a no-cost $50,000, 10-year term life insurance policy to individuals and their families with an annual income between $10,000 and $40,000. To qualify, you must work at least part-time, have a child under the age of 18, and be free of any potentially life-threatening health conditions.

However, there is a catch to this free policy. If the policyholder passes away during the coverage term, the beneficiary will not receive a lump-sum settlement. Instead, MassMutual will hold the money in a trust and reimburse the funds directly to the beneficiary's preschool, private school, trade school, university, or college. The beneficiary may use the funds until the age of 35 or for ten years after the policyholder's passing, whichever comes first. These funds can cover expenses such as books, tuition, dormitory fees, and student loans.

While MassMutual's LifeBridge plan is an excellent option for those who qualify, it may not be suitable for everyone. If you are looking for more coverage or do not meet the eligibility requirements, there are still ways to obtain life insurance at a low cost. Here are some tips to help you get the lowest rates on your life insurance policy:

• Maintain a healthy weight and overall health. Life insurance companies consider your weight and health when calculating your rate, as these factors can impact your life expectancy.
• Avoid tobacco products. Tobacco use has grave effects on your health and increases your risk of developing life-threatening conditions.
• Control chronic medical conditions. While certain chronic conditions can lead to higher premiums, keeping them under control can help you obtain lower rates.
• Shop around for the best rates. Premiums for the same type of coverage can vary significantly between providers, so it is worth comparing rates before choosing a policy.
• Buy life insurance at a younger age. Generally, the younger you are, the healthier you are, and the lower your premiums will be.
• Keep a clean driving record. Insurance carriers consider individuals with clean driving records to be less likely to be involved in accidents, which can result in lower rates.
• Choose term life insurance over whole life insurance. Term policies are typically more affordable than whole life policies as they are issued for a pre-set amount of time.

Low-cost life insurance

While it is not possible to get life insurance for free, there are some low-cost options available. The cost of life insurance depends on several factors, such as age, medical history, and lifestyle. The type of policy and the coverage amount also play a significant role in determining the cost. Here are some tips to help you find low-cost life insurance:

• Buy early: The younger you are, the lower your premiums are likely to be. Buying life insurance when you are young can help you lock in lower rates.
• Maintain a healthy weight: Your weight is a factor that insurance companies consider when calculating your rate. Maintaining a healthy weight and a healthy lifestyle can lead to lower premiums.
• Avoid tobacco products: Tobacco use has negative effects on your health and increases your premiums. Quitting tobacco products can improve your health and lower your life insurance rates.
• Control chronic medical conditions: While certain chronic conditions can lead to higher premiums, keeping these conditions under control can help you obtain lower rates.
• Shop around: Premiums for the same type of coverage can vary significantly between providers. It is recommended to get quotes from multiple carriers and compare rates to find the most affordable option.
• Choose term life insurance: Term life insurance is generally more affordable than whole life insurance. Term policies are issued for a specific period, while whole life insurance policies last a lifetime.
• Consider group life insurance: Many employers offer group life insurance as a benefit to their employees, which can provide basic coverage at no additional cost. However, the coverage amount tends to be low, and the policy usually ends when you leave the company.
• Evaluate your coverage needs: Reevaluate your coverage needs over time. Once your mortgage is paid off or your children have moved out, you may not need as much coverage. Adjusting your coverage level can help lower your premiums.
• Bundle your insurance policies: You may be able to lower your overall insurance costs by bundling your life insurance with other types of insurance, such as home or auto insurance. Some companies offer discounts when you purchase multiple policies from them.
• Corebridge Financial (formerly AIG Life)
• Mutual of Omaha
• State Farm
• Protective Life
• Nationwide
• Pacific Life
• Guardian Life

Term life insurance

There are several types of term life insurance policies:

• Fixed Term: This is the most popular type of term life insurance. It is the most basic version and usually lasts 10, 20, or 30 years. The premiums remain the same throughout the policy.
• Increasing Term: This type of policy allows you to increase the value of your death benefit over time, but your premiums will also increase slightly. These policies tend to be more expensive but usually deliver a larger payout.
• Decreasing Term: This type of policy reduces the premium payments over time, which can result in a smaller death benefit. This type of insurance may be suitable for those who predict they will have fewer financial obligations as they age.
• Annual Renewable: This type of insurance provides coverage on a yearly basis and must be renewed by the policy end date. The premiums usually increase each time the plan is renewed, making this option more expensive overall. However, it is a good choice for those who only need short-term coverage.

Permanent life insurance

There are a few different types of permanent life insurance policies:

Whole Life Insurance

Whole life insurance is one of the most common types of permanent life insurance. It covers you for your whole life and has fixed premiums that won't change even as your age and health do. You'll also earn cash value on your policy, giving you another financial tool to use as you work toward your goals. Whole life insurance is usually like a fixed-rate mortgage—the premiums never change unless you select a policy where that’s possible.

Universal Life Insurance

Universal life insurance allows you to adjust your premiums and death benefit, giving you flexibility as your financial circumstances change. The cash value growth is typically tied to market interest rates.

Indexed Universal Life Insurance

Indexed universal life insurance is a specific type of universal life insurance that’s tied to a stock or bond index, like the S&P 500. It offers similar flexibility in premiums and death benefits as universal life.

Variable Universal Life Insurance

Variable universal life insurance has flexible premiums and a savings component, but more factors influence how the savings can grow. The savings portion, or cash value, grows based on the investment methods that you choose.

When to get life insurance

While there is no "perfect" age to get life insurance, it is recommended that you purchase it as early as possible. The younger and healthier you are, the more affordable the premiums tend to be. Starting early ensures that you lock in lower rates and protect your loved ones sooner. Buying coverage while you're young and healthy can also lead to lower rates and long-term financial security.

• When you have a family or are planning to start one: If you have people depending on your income, such as a spouse, children, or other family members, it's crucial to have life insurance. The death benefit can help cover living expenses, pay off debts, and provide financial support for your loved ones.
• When you have significant debt: If you have debt that will carry on after your death, such as a mortgage, credit card debt, or student loans, life insurance can help ensure that your loved ones are not burdened by these financial obligations.
• When you're a stay-at-home parent or spouse: Even if you don't earn a traditional salary, your unpaid labour (such as childcare, cooking, and cleaning) would be costly to replace. Life insurance can help cover these expenses for your spouse or partner in the event of your death.
• When you're a business owner: If you're integral to the daily operations of your business, your death could impact its success. Life insurance can provide financial support to your business partners or heirs, helping them cover expenses and hire additional help.
• When you want to cover final expenses: Life insurance can help cover funeral and burial costs, which can be significant.
• When you're a co-signer or co-owner of debt: If you have co-signed or co-owned debt, such as a mortgage or loans, your co-signer or co-owner may be left with the burden of paying off these debts if you die. Life insurance can help ensure that they are not financially burdened.

Remember, the right time to buy life insurance depends on your personal and financial circumstances. It's important to consider your family situation, health, and financial obligations when making this decision.

Frequently asked questions