The Massachusetts Mutual Life Insurance Company, commonly known as Mass Mutual, is one of the largest life insurance companies in the world. Serving over 13 million clients worldwide, the company has expanded to sales of $25 billion annually, and operates over 1800 offices in various locations around the world. Mass Mutual has a very strong financial record, posting dividends to its members every year for the last 155 years.
The company began business in 1851 by a man named George W. Rice in Springfield, Massachusetts. Rice had word for Hartford Mutual, a large insurance company in Connecticut, and had learned the principals of mutual insurance companies, which are owned by the policyholders. With the help of 31 investors, Rice managed to raise the $100,000 required by law at that time to begin a mutual insurance company.
A Westward Expansion
The company followed the westward expansion of the country, growing exponentially as the years passed. What started as a small personal insurance firm was a nationwide insurer by 1855, with offices as far west as Chicago. Over the next decades, the company grew with carefully regulated growth, maintaining its corporate integrity in a time when many speculative insurance firms were cropping up and dying in a matter of years. The company turned inward for leadership, relying on guidance from those who had come up “through the ranks,” and managed to not only keep its assets but to expand them in keeping with the turns of the economy.
The company offered policy loans to its shareholders during the bleakest days of the Great Depression, and continued to grow in the following decades, expanding its investment operations into new areas which brought attention to the company and dividends to the policyholders. Always eager to embrace cutting-edge technology, the company was one of the first major insurers to understand the future of the computer revolution, and instituting computer-based systems and such innovative work practices as “flextime” schedules during the 1970’s.
In 1996 the company bought out the Connecticut Mutual Life Insurance company. This merger strengthened Mass Mutual’s holdings and, in turn, created a mutual life insurance company that became one of the top five in the nation. The growth of the company continued until 2001, when the company’s major New York offices were destroyed in the attacks on the World Trade Center. Incredibly, the company lost no employees, and quickly pulled itself back into the market with a strong focus on diversification, posting profits again by the end of the year.
Mass Mutual Life Insurance Today
Today, Mass Mutual offers a variety of insurance products, including its most popular whole life insurance plans, disability insurance, retirement protection, long-term care policies, and annuities. Mass Mutual’s wide variety of financial products are administered by eight subsidiaries, including Oppenheimer Funds, First Mercantile Trust Company, and MassMutual International. Mass Mutual offers a variety of types of financial services, including retirement planning, advertising its products under the umbrella of “Good Decisions,” and offering its customers sound financial planning options at all stages of life.
Mass Mutual offers both individual and family-based insurance products. While term life policies are available, Mass Mutual has built the majority of its insurance capital on the sale of whole life products. Unlike term life, which does not accrue significant value in the long term, whole life takes a portion of premiums paid and, through the power of investments, makes loan and cash value much higher. Further, once a whole life policy is “paid up,” that value will remain for the policyholder’s life, unlike term insurance, which expires after a set period of time. Many people find whole life insurance a good way to invest for the future, for college expenses, or for a variety of other purposes.
Besides term and whole life policies, Mass Mutual also offers permanent life insurance, universal life insurance, variable universal life insurance, and survivorship life insurance. Permanent life insurance is a form of term life that retains cash value. Universal life insurance offers more options such as coverage increases or decreases, and variable premiums. Survivorship life insurance pays a benefit on the death of both spouses, rather than two more expensive single policies for a couple.
Mass Mutual Life Insurance Ratings
In 2011 Standard & Poor’s, a nationally-recognized financial analysis group, gave Mass Mutual a score of AA+ (Very Strong), while A. M. Best, which rates insurance companies, rated it A++ (Superior), placing it in the top 15 companies it rated. Fitch and Moody’s rated the company “Very Strong” and “Excellent,” respectively. Mass Mutual’s current holdings total around $448 billion. Mass Mutual is currently ranked 93rd on 2010 Fortune 500, a listing of the top financially-stable companies in the United States.