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News Massachusetts Division of Insurance Offers Life Insurance Tips this Awareness Month

  • Division of Insurance

Life insurance can help families that could struggle financially if a family member dies unexpectedly by replacing lost income or providing funds to beneficiaries to pay living expenses. A recent survey from the National Association of Insurance Commissioners (NAIC) found that over half of survey respondents believe that if they died within the next 10 years, their beneficiaries would depend on their life insurance payout to meet their financial obligations.

This Life Insurance Awareness Month marks an opportune time for Massachusetts residents who have purchased a life insurance policy or are considering purchasing a life insurance policy to review their circumstances and decide whether coverage is right for them.   “Life insurance can be a critical component of preparing for your family’s future and it’s important to feel confident that your family will be financially secure," said Commissioner of Insurance Gary Anderson.

To increase awareness about life insurance, the Massachusetts Division of Insurance offers the following advice:

  • To determine what policy is best for you, you should consider all available assets and compare them to your family’s obligations, including burial and final illness expenses immediately due; ongoing financial expenses as home mortgages, utility bills, and day-care costs; and funding the long-term expenses of college tuitions and retirement.
  • Massachusetts law allows you ten days to change your mind about purchasing a life insurance policy. This is called a free look period. If you decide to cancel the policy within ten days of purchasing it, the company will return all of the premiums you have paid.
  • When purchasing life insurance, shop around and compare policies and premiums. Be sure that you understand the type of policy you are purchasing and how the benefits are paid when you die, as well as whether there is a cash value should you surrender the policy. There are four basic types of life insurance:
    • Term Life policies provide a death benefit to your beneficiary if you die within the policy term. Term Life Insurance premiums generally are less expensive but premiums can increase as you age. Term polices typically do not have any cash value.
    • Whole Life policies, which may also be called straight life, ordinary life, or permanent insurance, provide a death benefit regardless of when you die, as long as your policy is active and you pay all necessary premiums.
    • Universal Life policies, which may also be referred to as Flexible Premium Universal Life, let you vary the amount and timing of your premium, as long as the premium that you pay is enough to keep the policy in force. It is very important with this type of policy to closely review your annual statement and be aware of the cost of insurance, the depletion of cash value, and the policy value.
    • Variable Life policies vary based on the investment performance of the assets in which your premium payments are invested. Death benefits and cash values are directly related to the performance of investment options you choose.
  • You will usually be required to fill out a health and lifestyle questionnaire in order to purchase a life insurance policy and you may need to have a medical exam. The cost of your policy takes into account your age, height, weight, medical history, occupation, family health history and other personal habits like smoking, as well as whether you regularly engage in activities considered risky by the insurer such as motorcycle riding, skiing, or climbing.  Any false statements on the application could reduce or cancel your coverage.
  • Likewise, if you have an existing policy and are considering a new policy, or have an existing policy that lapses, your health may affect your ability to get a new policy or the premiums you will pay.
  • Review existing policies once a year or following major life events such as divorce or remarriage to make sure that you do not need to make changes to your named beneficiaries. There are no restrictions on the number of beneficiaries you can name, or how you decide to divide your assets amongst them. However, generally, insurance companies will not award death benefits to a minor. It is also recommended you name a second or third beneficiary, also known as contingent beneficiaries, in case something happens to your primary beneficiary.
  • It is the responsibility of the beneficiary to notify the insurance company of your death, which is why it is important to keep your policy information safe and accessible, and keep your beneficiary fully informed. A death certificate or other legal document will be required to verify your death.

Every year, millions of dollars in life insurance benefits remain unclaimed either because beneficiaries can't find their deceased loved ones' policies or, in some cases, may not even know the policies exist. To help solve this issue, the NAIC created a free online resource to search for missing polices. Additional information about this life insurance locator can be found here:

More information about life insurance can be found on the Division of Insurance’s website:  If you have questions about your particular policy, or are considering purchasing one, contact your insurance agent or company.

Division of Insurance 

The primary mission of the Division of Insurance (DOI) is to monitor the solvency of its licensees in order to promote a healthy, responsive and willing marketplace for consumers who purchase insurance products. Protection of consumer interests is of prime importance to the Division and is safeguarded by providing accurate and unbiased information so consumers may make informed decisions and by intervening on behalf of consumers who believe they have been victimized by unfair business practices.