Massachusetts Life Insurance

In this article...
  • Massachusetts life insurance laws may differ from those in other states. Learn how the state regulates coverage and what resources are available to consumers.

Life insurance provides financial protection for approximately 90 million families nationwide, but the laws governing coverage can vary from state to state. Many of these laws were designed to ensure a fair marketplace and protect consumers from unjust business practices, so it's important to understand how they may impact your policy options. In this article, you'll learn how Massachusetts life insurance coverage is regulated and what resources are available to help consumers.

Massachusetts Life Insurance Rules and Specifics

In Massachusetts, life insurance is governed by rules set forth in Title 22 – Chapter 175 of the Laws of Massachusetts. These laws are enforced by the Massachusetts Division of Insurance, which monitors state-licensed companies for compliance and intervenes on behalf of consumers when necessary. Highlights of Title 22 include a free-look period, grace period for late payments and mandatory interest on claims that aren't settled within the required timeframe.

The Free-Look Period

Massachusetts insurers must offer new policyholders a free-look period, which should last for at least 10 days. During this trial period, policyholders may cancel their coverage for any reason and receive a full refund. All policy contracts must include a notice declaring the terms of the free-look period.

The Grace Period for Late Payments

Under Massachusetts law, policyholders are entitled to a 30-day grace period for late premium payments. If the policyholder fails to make a payment, the issuing company may not legally cancel the policy or reduce the contractual benefits until at least 30 days have passed. 

Mandatory Interest Accrual on Unsettled Claims

If a claim filed against a Massachusetts life insurance policy isn't settled within 30 days, the issuer must pay interest on the benefit amount. However, proof of the insured's death must be supplied before a claim can be settled.

Life Insurance Resources in Massachusetts

The Commonwealth of Massachusetts Division of Insurance offers consumer resources for life insurance policyholders, beneficiaries and other interested parties. When visiting the division's website, consumers will find:

  • A guide to life insurance coverage
  • An online complaint form
  • An online suspected fraud reporting form
  • Insurance agent and company searches
  • A lost insurance policy locator
  • An online public records request form
  • Regulatory information

Massachusetts policyholders and beneficiaries who've been affected by an issuing company's bankruptcy are protected through the Massachusetts Life and Health Insurance Guaranty Association, a private organization that consists of state-licensed insurance providers. The association provides continuing coverage for life insurance policies and annuities when member companies can no longer fulfill their financial obligations. Coverage may be provided up to the following amounts:

  • $300,000 in death benefits
  • $100,000 in cash surrender value
  • $250,000 for annuities

The guaranty association's coverage doesn't extend to policies issued by companies that aren't licensed to do business in Massachusetts, and protections don't include non-guaranteed policy components, such as those featured in variable life insurance plans.

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