Category Archives: Massachusetts Life Insurance Company

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.