You just lost someone. It’s heavy. Then, a packet arrives from MetLife. Instead of a single lump-sum check for the full life insurance payout, you find a guidebook for something called a Total Control Account (TCA). It looks like a checkbook. It feels like a bank account. But honestly, it isn't exactly either of those things, and that’s where people get tripped up.
Most folks just want the money to pay for the funeral or settle the mortgage. Seeing a "settlement option" instead of a wire transfer can feel like a curveball. The Metropolitan Life Total Control Account is basically a retained asset account. MetLife keeps the death benefit proceeds in their general investment pool and gives you a "checkbook" to draft against those funds. You get to breathe for a second. You don't have to decide what to do with $500,000 while you're still picking out flowers for a service.
But there is a catch. Or a few of them.
Is the Total Control Account Actually a Bank Account?
Short answer? No.
When you put money in a Chase or Wells Fargo account, it’s protected by the FDIC. If the bank goes belly up, the feds have your back up to $250,000. The Metropolitan Life Total Control Account is different. These funds are backed by the financial strength of MetLife itself. While MetLife is a massive, "too big to fail" style institution, these aren't federally insured deposits. Instead, they are protected by State Guaranty Associations. Every state has different limits, usually topping out around $300,000 for life insurance death benefits. If you're holding a million-dollar payout in a TCA, you're technically taking on more credit risk than you would at a traditional bank.
It's a nuance. Most people don't care because MetLife has been around since the 1860s. Still, you should know where the safety net actually sits.
The account functions through "drafts." They look like checks. You can write one to your contractor or your brother, but they are technically drafts processed through a servicing bank (often State Street Bank and Trust Company). Because it's not a standard checking account, you can't always use it for "Point of Sale" transactions. Try buying a latte with it? Probably won't work. Try paying for a SUV? That’ll work fine, provided the draft is over the minimum limit—usually $250.
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Why MetLife Wants You to Keep the Money There
Let’s be real. MetLife isn't doing this solely out of the goodness of their heart. They are a business.
When the money stays in a Total Control Account, MetLife invests that capital. They might be earning 5% or 6% on that money in the broader markets. In return, they pay you a much lower interest rate. For years, these rates were hovering near the absolute minimum—often around 0.50% or 1.00%.
You're basically giving them a low-interest loan.
However, the rate is guaranteed never to fall below a certain floor, which is usually spelled out in your specific policy paperwork. If you need a "parking lot" for your money while you find a fiduciary financial advisor, it’s a great tool. If you’re leaving it there for five years? You’re likely losing out on significant compound interest you could have earned in a high-yield savings account or a brokerage fund.
The "Checkbook" Confusion and Beneficiary Rights
There was a lot of noise a few years back—including some high-profile lawsuits and scrutiny from the SEC and state regulators—about how these accounts were marketed. The beef was that insurers made the TCA look like the default way to get paid.
Beneficiaries felt forced into it.
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Here is the truth: You almost always have the right to a single sum payment. If you want the full check right now, you can ask for it. Even if they sent you the TCA "checkbook" already, you can simply write a single draft for the entire balance of the account and deposit it into your own personal bank. Boom. Account closed.
Some people love the TCA because it keeps the "death money" separate from their "life money." It prevents emotional spending. If you see $200,000 land in your everyday checking account, you might feel an impulse to spend it. Keeping it in the Metropolitan Life Total Control Account acts as a psychological barrier.
Taxes and the Fine Print
Let’s talk about the IRS because they always get their cut eventually.
The life insurance payout itself—the principal—is generally income tax-free. That’s the beauty of life insurance. However, any interest you earn while that money sits in the Total Control Account is taxable. MetLife will send you a 1099-INT at the end of the year.
- Minimum Balance: Usually, if the account drops below a certain threshold (like $5,000), MetLife will just send you a check for the remainder and close it out.
- Fees: One of the few perks here is that these accounts are typically fee-free. No monthly maintenance fees, no "per-check" charges. They make their money on the interest spread, so they don't need to nickel-and-dime you.
- Access: You can usually name a beneficiary for the TCA itself. If you die before you spend the money, the remaining balance goes to your heirs, bypassing probate in many instances.
What Most People Get Wrong
People often think they are locked in. They think once the TCA is opened, the money is "tied up."
That’s a myth.
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It is your money. You have total control—hence the name. If you decide tomorrow that you want to move the funds to a Vanguard index fund or buy a beach house in Florida, you just write the draft. The only real restriction is the minimum draft amount. You can't write a check for a $12 pizza.
Another common misconception is that the interest rate is "good." It’s usually not. It’s competitive with a standard, big-bank savings account, which is to say, it’s pretty dismal compared to what you can get if you’re willing to shop around.
Real-World Strategy for Beneficiaries
If you just received a packet for a Metropolitan Life Total Control Account, don't panic. You don't have to fill it out today.
First, look at your immediate liquidity needs. Do you have bills that need to be paid within the next 30 days? If so, the TCA is a very fast way to get access to funds without waiting for a traditional bank to clear a massive six-figure check, which can sometimes take 7 to 10 business days.
Second, check the current interest rate MetLife is offering. Compare it to a high-yield savings account (HYSA). If MetLife is offering 1.5% and an online bank is offering 4.5%, you are literally losing thousands of dollars a year by being "comfortable."
Third, consider the "Decision Window." Grief is a terrible time to make investment choices. The best use of the TCA is as a 3-to-6 month waiting room. Use that time to interview a fee-only financial planner. Let the money sit, earn a little bit of interest, and keep it safe while you process your loss.
Actionable Steps to Take Now
If you are holding a MetLife TCA kit, follow this sequence:
- Verify the Principal: Make sure the amount credited to the account matches the face value of the life insurance policy plus any "unearned" premiums the deceased paid.
- Locate the Drafts: If you haven't received the "checkbook," call MetLife at 1-800-638-7283. This is their dedicated customer service line for these accounts.
- Check Your State's Guaranty Limit: Search for your state’s "Life and Health Insurance Guaranty Association" website. See what the coverage limit is. If your payout is $500,000 and the limit is $300,000, move the excess to an FDIC-insured bank immediately.
- Draft a "Transfer" Check: If you decide you want the money elsewhere, don't just "close" the account via phone. Write a draft for the full amount, write "For Deposit Only" on the back, and put it into your preferred investment or savings account.
- Keep the Records: Save the final statement. You will need it to prove the origin of the funds if you are ever audited, as life insurance proceeds are generally not considered taxable income, but you need to be able to show where that $250,000 "windfall" came from.
The Metropolitan Life Total Control Account is a tool, not a trap. It offers breathing room during a chaotic time, but it’s rarely the best long-term home for your inheritance. Move at your own pace, but keep your eyes on the interest rates.