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I came across this article about a month ago (sorry for the delay). http://news.cincinnati.com/apps/pbcs.dll/article?AID=/AB/20080908/ENT09/809080314/

To sum it up, MassMutual is giving away free life insurance to parents of dependent children who make between $10,000 and $40,000 a year. MassMutual will pay the premiums, and once the parent or guardian dies, MassMutual will put $50,000 into a trust for the dependent child to pay for college. This is a nationwide program. Here is where you can get more information about the program: http://www.massmutual.com/mmfg/pdf/lifebridge_eligibility.pdf

I looked at this searching for something dealing with insurable interest. I am not familiar with the insurance laws in Ohio (where I saw the news story), but we’ve studied that here in Texas, there needs to be an insurable interest in the life of the insured. Therefore, how would this work for a Texan? In the literature on MassMutual’s website, it says:

“We realize that all children – including yours – are the future of our country. And the more educated our future leaders are, the better prepared they will be to help meet the challenges of tomorrow.”

Is that enough of an insurable interest–that the parent, who cannot make more than $40,000 annually, will in the event of death not be able to pay for his or her child’s college tuition? In the end, who will challenge it–not the dependent or the insurance company who knowingly entered the contract? Any thoughts here or am I missing something?

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One Comment

  1. I just phoned MassMutual. They say it is available for sale in Texas. I am wondering also about the insurable interest question. A trust is the beneficiary of the policy. And, while the trust may be obligated to act for the benefit of the child, that is not quite the same thing as making the child the beneficiary.


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