Life Insurance Simplified: Cm Insurance Explained

C.M. Life Insurance Company is a subsidiary of Massachusetts Mutual Life Insurance, which is itself a subsidiary of Massachusetts Financial Group. C.M. Life Insurance Company offers life, accident, and health insurance coverage, as well as survivorship life insurance, term life insurance, and individual annuity products. The company was established in 1980 and is based in Springfield, Massachusetts.

Term life insurance

C.M. Life Insurance Company is a wholly-owned stock life insurance subsidiary of Massachusetts Mutual Life Insurance Company (MassMutual). It offers a range of insurance products, including term life insurance.

Benefits of Term Life Insurance:

• Affordability: Term life insurance is known for its low cost compared to whole life insurance. The shorter coverage period translates to lower rates, making it an economical choice for individuals and families.
• More Coverage: Due to its affordability, term life insurance allows individuals to purchase a larger death benefit, providing greater financial security for their loved ones.
• Tax-Free Payout: The death benefit received by beneficiaries from a term life insurance policy is typically tax-free, ensuring that the full amount is available for their use.
• Guaranteed Protection and Premium: Term life insurance offers fixed death benefits and premiums, providing certainty and peace of mind for policyholders.

Types of Term Life Insurance:

• Fixed Term: This is the most common type, offering a fixed coverage amount and premium payment for the chosen term length.
• Increasing Term: This type of policy allows for an increase in the value of the death benefit over time, resulting in slightly higher premiums. This option tends to be more expensive but can deliver a larger payout.
• Decreasing Term: In contrast, decreasing term life insurance reduces the coverage amount and premium payments over time, suitable for those anticipating fewer financial obligations as they age.
• Annual Renewable: Annual renewable life insurance provides coverage for a year and must be renewed annually. While premiums tend to increase with each renewal, this option is ideal for those needing short-term coverage.
• Group Term: Group term insurance is typically purchased through an employer and functions as a workplace plan, offering coverage to all employees.
• Coverage Period: Term life insurance provides coverage for a specific period chosen by the policyholder, whereas whole life insurance offers coverage for the policyholder's entire life.
• Rates: Term life insurance rates are generally lower than whole life insurance rates since coverage is limited to a specific term.
• Death Benefit: In term life insurance, the death benefit is guaranteed if the policyholder passes during the term. Whole life insurance guarantees a death benefit regardless of when the policyholder passes.
• Cash Value: Whole life insurance often includes a cash value component that grows at a constant rate, allowing early access to the cash value. Term life insurance does not typically have a cash value component.

Permanent life insurance

There are several types of permanent life insurance policies:

Whole Life Insurance

Whole life insurance is a common type of permanent life insurance. It covers the policyholder for their whole life and builds cash value in a secure account. Whole life insurance policies have regularly scheduled premiums which do not change, even as the age and health of the policyholder does.

Universal Life Insurance

Universal life insurance offers the same death benefit and cash value accumulation as whole life insurance, but with the added flexibility of being able to adjust premium payments. This means that payments can be scaled down or skipped if needed, however, this may negatively impact the cash value of the plan and premiums could increase over time.

Variable Universal Life Insurance

Variable universal life insurance offers flexible premiums and a savings component. The savings portion, or cash value, grows based on the investment methods chosen by the policyholder. There is usually a minimum and maximum growth rate allowed.

Indexed Universal Life Insurance

Indexed universal life insurance is similar to permanent life insurance but the cash value grows based on a chosen stock market index. If the chosen index is performing well, the account will grow, and if not, some companies allow it to grow at a minimum rate.

Survivorship or Second-to-Die Insurance

This type of policy covers two people and pays the death benefit after both have died.

The cost of permanent life insurance depends on factors such as age, medical history, family size, and location. It is generally more expensive than term life insurance but offers the benefit of indefinite coverage and the ability to accumulate cash value.

Universal life insurance

C.M. Life Insurance Company is a subsidiary of Massachusetts Mutual Life Insurance Company (MassMutual). MassMutual offers two main types of life insurance: term and permanent. Permanent life insurance, which includes whole life insurance and universal life insurance, provides a death benefit to beneficiaries that can last a lifetime.

While universal life insurance offers flexibility, there are some potential disadvantages. The cash value can be impacted by underperformance of investments or underpayment of premiums, which could affect the death benefit or cause the policy to lapse. Additionally, some withdrawals from the policy may be taxed.

Variable universal life insurance

C.M. Life Insurance Company is a subsidiary of Massachusetts Mutual Life Insurance Company (MassMutual) and is incorporated under the laws of the State of Connecticut. MassMutual offers various life insurance products, including variable universal life insurance.

Overall, variable universal life insurance may be suitable for individuals seeking permanent life insurance protection, comfortable with a higher risk tolerance, and interested in managing their investments. It offers the potential for greater growth compared to other types of life insurance but is more complex and risky.

Survivorship life insurance

C.M. Life Insurance Company is a subsidiary of Massachusetts Mutual Life Insurance Company (MassMutual). MassMutual offers a range of insurance products, including survivorship life insurance.

• Estate planning: Survivorship life insurance can help in estate planning by providing a death benefit to heirs, which can be used to pay off debts, taxes, and other final expenses.
• Creating an inheritance for heirs: A joint life insurance policy can leave a financial legacy for heirs to claim once both policyholders have passed away.
• Providing care for permanent dependents: Survivorship life insurance can be used to provide financial support for permanent dependents, such as an adult child with a disability, after the passing of both policyholders.
• Affordability: A survivorship policy can be more affordable than purchasing two individual permanent life insurance policies, allowing for more coverage at a lower cost.
• Qualifying for coverage: If one individual is unable to qualify for life insurance due to age or health issues, a survivorship policy can provide a way to obtain coverage or increase eligibility by considering the health of both policyholders.
• Accessing cash value: While the death benefit is only paid out after both policyholders have passed away, the surviving partner can access the policy's cash value during their lifetime through a life insurance loan.

However, there are also some drawbacks to survivorship life insurance. Some of the cons of survivorship life insurance include:

• Single death benefit: Survivorship policies may not be suitable for couples in good health who can afford the premiums for two separate policies, as separate policies allow for the payment of two death benefits.
• Partner cannot be a beneficiary: Survivorship policies require both insured individuals to pass away before paying out, so they cannot be used to provide financial support for a partner after the death of one policyholder.
• Difficulty with life changes: Joint life policies can be challenging to update in cases of divorce or other significant life changes, and it may be difficult to split the policy in these situations.

Frequently asked questions