Category Archives: Life Insurance

The Top 7 Myths about Life Insurance

Do You Know the Facts?

Life insurance is necessary to protect your loved ones in the event that something unexpected should happen. But many consumers don’t understand the details about life insurance that could save them money. Here are the top 7 myths about life insurance:

  1. Your family will only receive life insurance payments when you die.

Whole Life and Universal Life Insurance allow you to access benefits even while you’re still living. This can help with retirement income or costs associated with a serious illness. Both types of coverage include a savings component that can be really helpful—and you don’t have to wait until someone dies.

  1. Term Life Insurance is the cheapest option.

Not necessarily. While it is the least expensive of the three basic options—Term Life, Whole Life, and Universal Life—the premiums will increase each year. So in the long run, this could be an expensive type of coverage. That’s why it’s good to research and understand all of your options.

  1. If you’re young and healthy, you don’t need life insurance.

Actually, the opposite is true. When you’re young and healthy is the BEST time to get it! That’s because you can get coverage for a much better rate than when you’re over age 50, when health issues are more likely to develop. If you purchased it when you were young, by the time you’re older and in need of more medical care, you will have it at a rate that you wouldn’t have been able to get later on.

  1. Getting life insurance from your employer is all you need.

In order to have enough income for your dependents, it’s recommended that you have at least five to eight times your annual salary. As the cost of living increases, some even say you should have 10 to 12 times as much! And the coverage you receive from an employer typically only gives you one to two times your salary. Not only is this not enough, but you could lose it if you switch jobs. Often you can find more affordable coverage that won’t be affected should you change jobs.

  1. Life insurance is too expensive.

This is one of the biggest misconceptions about life insurance. According to a study done by Life Happens, about 80 percent of people overestimated the true annual cost of life insurance. For example, a 20-year, $250,000 Term Life Insurance policy for a healthy 30-year-old actually costs $160 a year.

  1. Since life insurance is all about providing for beneficiaries, a single person doesn’t need it.

For a single person, life insurance is still an important part of a smart financial plan. That person may want to leave something to help take care of aging parents or close friends. That person may also decide to have kids someday, and want to leave something for them.

  1. If my health isn’t good, I’m automatically disqualified from getting life insurance.

This isn’t true. Your policy may be a bit more expensive, but there is still a variety of options available to you. In fact, some companies specialize in cases that may be considered “high risk.” So it’s important to do your homework and find out what’s out there.

Remember to talk with professionals who can advise you on the best policies to suit your life and your financial situation.

At Zawada Insurance Agency, we’ll work with you to find the best, most affordable insurance coverage to fit you and your family’s needs.

Please contact Zawada Insurance Agency today. We’re a family-owned and operated independent insurance agency, located in Worcester, Massachusetts, serving central Massachusetts and beyond.

True or False: Insurance Quiz

Can you guess which of these 8 statements are true?

There are myths about insurance—auto, home, health—and they persist in spite of the facts. As we’ve said in other blogs, it’s important to get the facts straight before you purchase insurance of any kind. Here are eight true and false statements to see how well you understand insurance.

  1. Vehicles stored in your home or garage are covered under your Homeowner’s policy.

False. Cars and other vehicles should be covered by Auto Insurance. Garden tractors and other related items are part of what is covered by Homeowner’s Insurance.

  1. Commercial Liability Insurance provides coverage for your employees who are injured on the job.

False. Only Workers Compensation covers on-the-job injuries.

  1. Homeowner’s Insurance is based on the real estate market value of your house.

False. Your coverage is based on what it would cost to rebuild your home. This cost can vary, so an insurance agent can help you calculate these costs.

  1. The Affordable Care Act prohibits health insurance companies from basing rates on pre-existing conditions.

True. Health insurance companies used to raise the rates for people with a pre-existing condition. Not anymore. For those who have medical conditions such as high blood pressure, asthma and other chronic, pre-existing medical issues, this is a big relief. In addition, insurance companies can’t charge different amounts for men and women, either.

  1. It’s not necessary to have Other Structures coverage in your Homeowner’s policy.

False. But this is a trick question. It depends on you, the homeowner. Your Homeowner’s policy, at least 10% of it at least, is devoted to Other Structures. These include any buildings or structures not attached to your house—sheds, barns (not used for business), detached garages, driveways and fencing. You can always add to your Other Structures coverage if you need more. But it is important to keep it as part of your policy in the event of some unfortunate occurrence.

  1. If you get a speeding ticket in another state, it WILL follow you home.

True. Not only will it follow you, but it will also affect your insurance rates.

  1. Homeowner’s policies cover flood, earthquake and other natural disasters.

True. . .and False. They don’t automatically cover these things. Make sure you have it, or add it to your policy. The majority of policies exclude types of water damage.

  1. If your boat is hitched to the back of your vehicle on the highway and you back into someone, your Auto Insurance will cover it.

True. However, it will be limited to the coverage that your Auto Insurance provides, so it may not pay for property damage, injury or loss of life.

Keep checking our blog for more tips and advice about all types of insurance.

For all your home, auto, boat and other insurance needs, please contact Zawada Insurance Agency, Inc. We’re a family-owned and operated independent insurance agency, located in Worcester, Massachusetts, serving central Massachusetts and beyond.

The Facts about Life Insurance – 3 Types of Coverage You Need to Know

Maybe you’ve put off getting life insurance because you don’t want to think about it. But it’s very important for your financial planning to have insurance in place in case the unexpected should happen.

Why do you need life insurance? Simply, life insurance will protect the financial future of your loved ones should you die. The sum of money they receive can be used to pay off a mortgage, to help fund a child’s college education—any number of things.

Life insurance buyers need to do a financial fact sheet to assess their needs. You need to think about your long-term goals, what kind of insurance would be best throughout your lifetime, how much you save each year, your retirement plan, assets, debts and anything else that may affect the type of insurance you should get.

There are three basic types of life insurance. Here we’re going to break it down for you.

Term Life Insurance. This is the least expensive type of insurance which covers you for a limited period of time. Unlike other types of life insurance, there are no benefits given unless someone dies. A potential disadvantage—the premium is fixed, then goes up each year. When this happens, sometimes the insured can no longer afford it. But it is the least costly way to receive a substantial death benefit on a coverage amount.

Whole Life Insurance. This was a common type of insurance from 1940 to 1970 before more options became available. With this type of insurance, you can receive benefits while you’re still living. For example, someone with a terminal illness can access a large portion of benefits while they’re alive. It also secures your spouse’s income in case of an untimely death and can help with retirement costs. It includes a tax-sheltered cash account that builds up over time. No taxes are paid on gains each year, and the money can go to supplement your retirement. You’ll also receive dividends that can increase the cash in your policy.

Universal Life Insurance. This is a flexible, permanent life insurance that offers the best of both the other types of insurance. For instance, it is a low-cost option like term life insurance, and also includes a savings element like whole life insurance. Another advantage is a guaranteed level premium throughout your lifetime. That’s nice to know in case you’re worried about premium increases. Each month the cash value of the policy is credited with interest. This interest can be used to help pay your premium. The savings, death benefit and premium can be reviewed as your circumstances change throughout your lifetime.

Remember, the type of coverage you choose at one point in your life may not make sense as time goes on. That’s why it’s important to talk to professionals who can advise you on the best policies to suit your life and your financial situation.

At Zawada Insurance Agency, we’ll work with you to find the best, most affordable insurance coverage to fit you and your family’s needs.

Please contact Zawada Insurance Agency today at (508) 831-0133. We’re a family-owned and operated independent insurance agency, located in Worcester, Massachusetts, serving central Massachusetts and beyond.

3 Types of Life Insurance. Which one is right for you?

Life insurance provides your loved ones (or beneficiaries) with a sum of money when you die. This money can be used to help pay off a mortgage, pay for a child’s education, pay for the deceased person’s estate taxes and other payments.

There are two major categories of life insurance. These are:

Term Life Insurance – Covers you for a certain number of years, at any stage of your life.

Permanent Life Insurance – Refers to any life insurance contracts other than group or term life insurance.

The three most popular kinds of life insurance are:

  • Term Life Insurance
  • Whole Life Insurance
  • Universal Life Insurance

It’s important to understand the differences between each, so you can make the most informed decision about what type of life insurance to purchase.

Term Life Insurance is insurance without an investment component. However, your premiums will likely go up as you get older. In the case of premature death, term life insurance can pay off funeral and final estate expenses.

Whole Life Insurance is the most basic kind of insurance. It’s part savings, which is called a cash value, and includes a death benefit. Whole is more expensive and has higher premiums than term life insurance because it provides more guarantees. You can receive a certain amount of cash at a future date.

Which is better, term or whole? Whole life insurance policies have a benefit while the person is still living—while the cash builds up over time, you won’t have to pay taxes on the gain each year, and money can be used to supplement your retirement funds. You can’t do this with term life insurance. What’s more, you can add a rider to a whole life policy, which would enable someone who has a terminal illness to access as much as two-thirds of the benefits while they’re still living. This is another benefit that term life doesn’t offer.

Universal Life Insurance blends both whole and term life insurance. There is a cash value, which can be tied to a fixed interest rate that will adjust annually. Universal also offers flexibility in the amount you pay toward the premium. There is a savings portion, which can go toward paying for your insurance coverage.

Another type of insurance is Variable Insurance. This lasts for the duration of your life and includes more investment options. It’s structured like universal insurance, but the policy value may increase or decrease depending on the investments made. Variable can also help you accumulate retirement funds, protect financial well-being of loved ones, or transfer wealth to the next generation.

There are other types of life insurance as well, such as Survivorship Policies. These provide coverage at the time of a person’s death. The contract owner may select variable investment options—stocks, bonds and money market funds.

Because there are many types of insurance out there, it’s best to talk with professionals who can help you choose the policy that best meets your needs.

Zawada Insurance Agency is your all-in-one resource for helping you find the right coverage for you and your family. We’re a family-owned and operated independent insurance agency, working to get you the most comprehensive coverage at a competitive price.

For more information about life, homeowner, car and other insurance coverages, please contact Zawada Insurance Agency today.

Zawada Insurance Agency, Inc. located in Worcester, Massachusetts, serving central Massachusetts and beyond.