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Tom Meaglia, ChFC®, AEP®,
CLU®, CRPC®, MSFS
Chartered Financial Consultant
Investment Advisor Representative
Chartered Retirement Planning Counselor
CA Insurance Lic. #0567507
Meaglia Financial Consulting
2105 Foothill Blvd., #B140, La Verne, CA 91750
Toll Free: 800-386-3700
Bus: 909-593-6105
Cell: 818-681-8600
Fax: 909-593-6120
Email: tom@meagliafinancialconsulting.com
Website: www.meagliafinancialconsulting.com
September/October 2018
Life Choices
Term or perm? This sounds like something you might hear from a hair stylist, but they’re actually the two main types of life insurance. Because September is Life Insurance Awareness Month, now is a good time to learn about the differences between term and permanent life insurance.
Term Life
Term life insurance is insurance that covers you for a term — a certain period of time. While there are level premium term policies that keep premiums the same for a specified number of years, the most recognizable type of term insurance is renewed annually. Declining health can increase your cost, and premiums typically increase as you age.While term life insurance offers a death benefit, it does not offer cash value. A few policies may offer a return of premium option, usually at a higher price. Term life may be appropriate if you have a temporary insurance need or limited financial means. If you buy term, consider a policy that allows you to convert without medical underwriting to permanent life insurance at a later date.
Permanent Life
Like term insurance, permanent life insurance offers a death benefit. Premiums for permanent life insurance are typically more expensive in the beginning than for term insurance, but never increase as long as you own the policy and pay premiums on time.The cash value component, which builds over time, is among permanent life’s most attractive features. There are a number of ways to use this cash value. Put it back into the policy to increase the death benefit or use it to reduce premiums. Or you may take a loan against the cash value or withdraw cash. *
Term or perm? It’s your choice. Talk to an insurance professional to learn more.
* Loans and withdrawals can reduce the policy’s cash value and death benefit, and they may result in a tax liability. They can also cause the policy to lapse. If the policy lapses, or is surrendered, any loans considered gain in the policy may be subject to ordinary income taxes. If the policy is a Modified Endowment Contract (MEC), loans are treated like withdrawals, but as gain first, subject to ordinary income taxes. If the policy owner is under 59 1/2, any taxable distribution from the policy may also be subject to a 10% federal tax penalty. Talk to a tax professional for information about the tax treatment of withdrawals and loans.
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Investment advisory services are offered through Fusion Capital Management, an SEC Registered Investment Advisor. The firm only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. SEC registration is not an endorsement of the firm by the commission and does not mean that the advisor has attained a specific level of skill or ability. All investment strategies have the potential for profit or loss.
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