We all want a better life for our children, and a crucial part of their success is a well-rounded education. One of the greatest aids in personal and professional success is attaining a college degree. Study after study indicates that college graduates have the potential for greater annual and lifetime earnings, and that those financial benefits tend to increase over time. According to the U.S. Census Bureau, people with a bachelor’s degree earn an average 86% more than their high school counterparts. For parents, though, the high costs can be daunting. Over the last 20 years, the cost to attend a public college has increased 250%, while the cost of a private education has risen almost 475%. Planning for your child’s education is a necessity these days, but what would happen if you passed away before those plans come to fruition? That’s where LifeBridge (SM) comes in. LifeBridge is an innovative life insurance program offered by MassMutual.
LifeBridge is a free life insurance program designed to protect your dream of providing an education for your children if you pass away before they complete their education. You didn’t hear me wrong, LifeBridge is free. We’ve all heard the adage that ‘you get what you pay for,’ but LifeBridge is one of the few exceptions that I’ve come across in my career. The program is offered through Massachusetts Mutual Life Insurance Company, also known as MassMutual. Why would a company offer a free life insurance program? – Because they recognize the value of balancing business interests with good corporate citizenship. As a member of the Board of Directors of Junior Achievement, I’ve seen first-hand MassMutual’s commitment to supporting young people trying to succeed. The company’s donations to local service agencies totaled nearly $7 million in 2011, funding a variety of educational and entrepreneurial programs. Bottom-line, MassMutual is a company that believes in giving back, and that led them to develop the LifeBridge program.
So, how does LifeBridge work? MassMutual will issue a $50,000, 10-year term life insurance policy on the life of a qualifying parent or legal guardian. The policy is held by a trust, administered by the MassMutual Trust Company, FSB, a wholly owned stock subsidiary. There is no cost to you – MassMutual pays the premiums. The $50,000 is used to cover the educational expenses of your eligible children. If you pass away during the 10 year term of the policy, your children have 10 years or until age 35, whichever is later, to use this $50,000 educational benefit.
Let’s review the eligibility requirements. You can apply for the LifeBridge program if you are between the ages of 19 and 42, are the parent or legal guardian of one or more dependent children under age 18, are a permanent, legal resident of the United States, and are currently employed full or part-time with a household income between $10,000 and $40,000 annually. As with any life insurance policy, you will be required to be in good health as determined by the insurer’s underwriting guidelines. If your children need to activate the funds through the policy, it’s important to realize that they will not receive the proceeds. The trust will only pay benefits directly to the educational institution. These funds can be used to cover expenses such as pre-school, private school, trade school or college tuition, fees, books, and room and board.
MassMutual’s goal is to provide $1 billion of free, educational insurance coverage. As of January 2012, they are well over halfway to their goal. So far, more than 12,300 policies have been issued through the LifeBridge program, totaling over $615 million in free life insurance coverage across the country. We all know the impact an education has on a child’s life, as well as the uncertainty of our own lives. An insurance policy like this one offers more than peace of mind. It may give your children the opportunity to earn a college degree, one of the keys to financial success.
AtCambridge, we encourage people to make informed financial decisions, and one of the wisest decisions a parent can make is to learn more about this valuable program. For more information on LifeBridge and how you can protect your child’s education at no cost to you, contact MassMutual at 1-800-272-2216, or visit them on-line at www.massmutual.com/lifebridge. Please note, Cambridge Credit Counseling is not affiliated with MassMutual. Until next time, I’m Thomas Fox for Cambridge Credit Counseling.