Category Archives: Life Insurance

Coronavirus Will Cause Life Insurance Rates To Increase

Our lives have literally changed overnight thanks to the Covid 19 pandemic. Most of us are stuck in our homes social distancing from family members, friends, neighbors, and co-workers. A trip to the grocery store means gearing up and bracing for longer lines and emptier shelves. Our schools are now just empty buildings instead of places of learning. Even the children would rather be there with their friends and teachers instead of being stuck at home with their parents and siblings.

Office buildings share the same fate. Most of us would rather be back at work telling stories around the water cooler with our co-workers as opposed to working remotely from home. If you are working on the front line we thank you and hope that you stay safe. You are the true heroes. The good news is that this will end at some point in the near future, and we will get back to normal. In the meantime, it is a great idea to take this occasion to be thankful for what you have instead of focusing on what you do not have.

It is also a good opportunity to concentrate on the important things in life such as your family, and how to best protect them. In addition to following all of the Covid 19 protocol in order to keep your family as healthy as possible, it is also important to either review your current life insurance policy, or consider taking one out if you do not have a policy in place. Now is the perfect time to do it because life insurance premiums are bound to go up based on the fact that lives are being lost because of Coronavirus.

Unfortunately, this trend will continue for a while before things level out. That means the life insurance premiums will rise with the death rate. Think of it in the following manner. Life insurance companies are forced to raise prices based on the immense increase in the policy payouts that are associated with the higher death rate. If that sounds a bit morbid, it is. However, it is important to explain the process so that you have a better understanding of how the process actually works.

The bottom line is that now is the perfect time to lock in your life insurance policy before the prices spike up. If you already have a life insurance policy in place, you should be asking yourself if there is enough coverage to protect your loved ones if something should happen to you? For example, most policyholders take out life insurance when they start a family, and then do not think much about it. That being stated, your family may have grown since that time, which means you need to increase the policy amount. If you have started a family and do not have life insurance, now is the time to get it.

In conclusion, the Covid 19 pandemic has taught us the importance of being prepared. Please consult with a professional insurance agent that specializes in providing life insurance. It is important to fully understand exactly what you are buying when it comes to insurance policies. If you have any questions, please call (508) 831-0133 to contact an associate at Zawada Insurance. We are happy to walk you through the details of your insurance policies and explain your coverage options. We look forward to helping you with all of your personal and or business related insurance needs now and in the future.

The Various Types Of Life Insurance Part 2 Of 2

As mentioned in part one of this article, term life insurance is the most popular type of life insurance amongst consumers. This is due to the fact that it is both cost effective and easy to understand. However, there are other types of life insurance that will provide you will additional benefits. You may very well decide to invest in one of the policies that are listed below depending on a vast variety of factors. It is always a smart idea to consult with an insurance professional prior to making any insurance related decisions that can affect the financial security of your loved ones.

Permanent Life Insurance

Although term life insurance is fairly easy to understand, permanent life insurance becomes a tad more complicated. This is due to the fact that permanent life is trying to accomplish two things at once. First and foremost, the intent of a permanent life insurance policy is to pay your beneficiaries in the event of your death. The second part is where it becomes more complicated. Permanent life insurance can also be used as an investment account because it includes something called cash value. In essence, cash value is like a savings account where you deposit money every month.

It is a pool of money that you own, which means you can access it or borrow against it. The longer that you have the policy, the more cash value the policy actually has. Another bonus is the fact that the permanent life insurance policy does not expire. In essence, it will continue on until the day you die, or cancel the policy. The details of how much money your loved ones will receive upon your death, how the cash value grows, and other important factors typically depends on the exact policy that you purchase. Permanent life insurance policies can include whole life, universal life, or variable universal life.

Whole Life Insurance

When you purchase a whole life insurance policy you pay a locked in premium amount to the insurance company each month until you either die, or decide to cancel the policy, which of course is not recommended. A portion of the premium goes into the cash value, which grows over the whole life of the policy. In essence, the longer you own the policy, the more money it is worth from a cash value perspective. Although whole life insurance is more expensive than term life insurance, having the opportunity to utilize a portion of your monthly payments as a cash value is certainly something to consider if the premium is still affordable.

Universal Life Insurance

Universal life insurance has a death benefit and cash value just like a whole life a whole life policy. However, universal life insurance policies offer adjustable premiums. In essence, you may be able to access some of the cash value in order to adjust your payments, which is a nice benefit that saves you money out of pocket. The bottom line is that the investment will grow over time, and may even be enough to offset the premium all together. Keep in mind that if you do choose to apply cash value to your premium payments, the cash value will decrease. That being stated, it is a worthwhile option to have, and is certainly something to consider if the premium is affordable.

Variable Universal Life Insurance

Perhaps the most complicated life insurance program is the variable universal life insurance policy. In essence it is a life insurance policy, a savings account, and a mutual fund all wrapped into one investment vehicle.  Variable universal life provides you with the ability to decide how your cash value is invested. As with any traditional mutual fund, there are both rewards and risks involved in the process. Here is how it works. You will be presented with a vast variety of investment options for your cash value, and you choose how risky you are with the investments. The bottom line is that you are in control of where your money is invested, however the policy has zero guarantees regarding how much money the cash value will end up being worth.

It is important to fully understand exactly what you are buying when it comes to insurance policies. If you have any questions, please call (508) 831-0133 to contact an associate at Zawada Insurance. We are happy to walk you through the details of your insurance policies and explain your coverage options. We look forward to helping you with all of your personal and or business related insurance needs now and in the future.

The Various Types Of Life Insurance Part 1 Of 2

Life insurance can be a confusing topic, especially for people that do not like to think about their ultimate demise, let alone talk about something as morbid as death. However, it is incredibly important to protect your loved ones, from a financial standpoint, just in case you do happen to die suddenly. Having the correct life insurance policy in place will accomplish that. The good news is once you have set it up, it is not something that you have to think about on a frequent basis.

All you really need to do is simply pay the bill when it is due, live your life, and sleep well at night knowing that your family will not face financial ruin upon your passing. That being stated, it is also important to know a bit about what you are getting into when purchasing a policy. As mentioned above, it can be a confusing topic unless it is properly explained.  So without further ado, the following information will teach you about the various types of life insurance.

Term Life Insurance

Term life insurance is the most popular types of life insurance available on the market. This is due to the fact that it is fairly simple and typically the most affordable choice that you can purchase. This type of life insurance does one thing and one thing only. The bottom line is that it pays the people you choose a fixed amount of money if you die. However, the term life insurance policy is not worth anything unless you do happen to die during the term.

In essence, you are paying the insurance company to assume the financial risk of your death during the period of time that the policy is in effect. The typical terms are typically 10 years, 15 years, 20 years, and 30 years. Here is an example of how it works. If you purchase a 10-year term life insurance policy with $250,000 coverage, you will make monthly payments for ten years. If you happen to die within those ten years, the insurance company will issue a check to your loved one in the amount of $250,000. This is known as the death benefit.

However, if you live longer than the ten years, the policy ends. The good news is you have outlived the policy. The bad news is that you need new life insurance coverage. That is why most consumers choose a longer term from the start, such as 20 or 30 years. The cost of the policy increases for longer terms. So a 10-year policy will cost you less than a 30-year policy. The other factor that determines the price you pay for the policy is the payout. It is highly recommended that you purchase a term life insurance policy that is 10-12 times your annual income.

If something happens to you, the death benefit will go a long way in replacing your income for the long term. Although a term life insurance policy is the most cost effective manner in which to protect your loved ones, the other types of life insurance plans provide additional benefits.

….To Be Continued….

It is important to fully understand exactly what you are buying when it comes to insurance policies. If you have any questions, please call (508) 831-0133 to contact an associate at Zawada Insurance. We are happy to walk you through the details of your insurance policies and explain your coverage options. We look forward to helping you with all of your personal and or business related insurance needs now and in the future.

Life Insurance Is A Key Piece Of The Financial Planning Puzzle

Life insurance is certainly not one of those topics that you enjoy talking about around the water cooler because it forces us to face our own ultimate demise. Purchasing a policy may even feel like a jinx to some of us. Although most people are aware of the fact that they need life insurance, they tend to procrastinate until a significant life event provides them with the incentive to purchase a policy. This is unfortunate, because death can occur at any time and for some it is too late. There are a plethora of benefits to having a life insurance policy in place. In fact, life insurance is a key piece of the financial planning puzzle. The following information will explain this even further.

Life Insurance Replaces Lost Income

A life insurance policy provides financial security to your loved ones after you have passed away. In essence, it will give you with peace of mind knowing that if you were to die suddenly your family will be covered from a financial standpoint. This holds particularly true if your family depend solely on your income. Think if it in the following manner. What would happen to your loved ones if you were to pass away? Will they be able to afford the basics such as shelter, food, and clothing, let alone the comforts of life without your income? You need a life insurance plan with adequate coverage so that your family is not left helpless when the monthly bills are due.

Life Insurance Covers Burial Expenses

Even a basic funeral can cost upwards of five to ten thousand dollars. That can be a tremendous financial burden on your family. The good news is that your life insurance policy covers burial expenses so that your loved ones can grieve without worrying about how they are going to pay for the funeral. In essence, life insurance provides your beneficiaries with a guarantee, and lifts the burden off of them and yourself while you are alive.

Life Insurance Pays Off Debt

Did you know that when you pass away it does not necessarily mean that your debt will disappear? That means your family may very well be responsible to pay your creditors. For example, if you and your spouse have co-signed for a mortgage, automobile loan, or other loans your spouse may become responsible for the repayment. In addition, your creditors could try to collect from your estate. Life insurance provides your beneficiaries with the ability to handle all of your remaining financial responsibilities.

Life Insurance Can Build Cash Value

Unlike Term Life Insurance, which stays in place for a set period of time, Whole Life Insurance provides permanent coverage that only ends if you cancel the policy. The reason why this is important to understand is due to the fact that Whole Life Insurance provides you with the ability to build up a cash value over time. Although Whole Life Insurance is more expensive than Term Life Insurance, it is an attractive option from a financial planning perspective. In essence, the cash value acts as an additional financial cushion that you can access at any time. This can come in extremely handy if you happen to experience a financial crisis at some point in the future.

Life Insurance Diversifies Your Investments

A great deal of financial savvy people utilize life insurance as an investment tool by taking out a universal life policy. These policies are attached to a particular investment product. Policyholders receive dividend payments that are based on the product’s performance. It is highly advised to read all of the fine print before signing the policy papers. That way you will be well aware of the potential risks prior to committing to the policy.

In conclusion, life insurance will ease the financial burden of the people that you leave behind, and can come in handy while you are alive as well. If you have any questions, please call (508) 831-0133 to contact an associate at Zawada Insurance. We are happy to walk you through the details of your life insurance policy and explain your coverage options. We look forward to helping you with all of your personal and or business related insurance needs.

Life Insurance Myths: Get the Facts

6 Things People Believe about Life Insurance

Many people put off talking about life insurance because it’s a subject they don’t want to think about. There are also many misconceptions about the purpose of life insurance and what it is and isn’t.

Here we’re going to clear up some of the myths about life insurance.

  1. Life insurance is only for funeral expenses, and I don’t want a fancy funeral. First, funerals cost more than you realize. In addition to that, life insurance also helps to protect the finances of the loved ones you leave behind. It can be used to pay off a mortgage, unforeseen medical expenses, even help to pay for a child’s college education. There are countless expenses that life insurance can help with.
  2. I’m perfectly healthy. I don’t need to get life insurance. The fact is, it doesn’t matter how healthy you are. Accidents happen every day. If the unthinkable should happen, the last thing you want is for your family to be left with sudden expenses they can’t afford.
  3. I don’t want life insurance because my family can’t access the money unless I’m dead. That is only true if you have Term Life Insurance. It’s the cheapest type of insurance, but can only be accessed after someone dies. You could, however, choose Whole Life or Universal Life Insurance, which enables you to take out money whenever you need it. For example, if you have Whole Life Insurance, you’d be able to access a large amount of benefits for medical expenses if someone becomes gravely ill. You can use it for retirement costs and other types of expenses as well.
  4. Once I choose a type of life insurance, my circumstances may change, and I won’t be able to change it. It’s important to meet with insurance professionals, like the experts at Zawada Insurance Agency, because you may need to review your current policy. If your situation should change, and you’d prefer to go with another policy, it is possible for you to do that.
  5. I should just go with Term Life Insurance because it’s cheaper than the others. In fact, Term Life Insurance may be well suited for you. However, you should know that the premium increases each year, unlike Whole and Universal Life Insurance. Universal Life Insurance is also a low-cost option, and your premiums will be fixed. So there are other types of coverage to consider.
  6. Life insurance policies are too confusing. They don’t have to be, which is why it’s good to talk with professionals to help you understand all of your options. For instance, Term Life will give you a substantial benefit when someone dies. Whole Life acts like a savings account, giving you a tax-free account that will increase over time. Gains made can go toward your retirement or other important expenditures. Universal Life Insurance combines the best of both the other policies in terms of flexibility and cost. The premium remains the same throughout your life, with no sudden increase in payments. Each month, you’ll get interest on your policy, which can be used to pay your premium or other things.

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.

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.