Sentences with phrase «event of a policy lapse»

However, in the event of a policy lapse, taxes must be paid on the cash value.

Not exact matches

Had the individual purchased permanent life insurance, he or she could have access to a potentially significant source of supplemental retirement income in the future (depending on the policy type), while preserving the death benefit in perpetuity (note, however, that the death benefit and cash value of a policy is reduced in the event of a loan or partial surrender, and the chance of lapsing the policy increases).

In the event of a foreclosure, they are generally past due taxes and a lapsed insurance policy, which add to the cost out of pocket for that lender when they foreclose.

In the event a policy lapses for any reason, a mortgage lender will find an insurer to cover the home on behalf of the policyholder.

This doesn't give them any coverage, it just means that they'll be notified of renewals, non-renewals, cancellations, lapses, and other significant policy events that might affect their interest in the policy.

In the event the insured dies and the policy lapsed within three years from the date of commencement (start) of the life insurance policy, then the insurance company is not liable to settle such claims.

In the event that you happen to experience financial setbacks and allow your policy lapse, without reaching the stage of cash value accumulation, the huge sum of money you spent on expensive premiums will be flushed down the proverbial toilet.

Had the individual purchased permanent life insurance, he or she could have access to a potentially significant source of supplemental retirement income in the future (depending on the policy type), while preserving the death benefit in perpetuity (note, however, that the death benefit and cash value of a policy is reduced in the event of a loan or partial surrender, and the chance of lapsing the policy increases).

If a policyholder has selected the automatic premium loan provision, a loan would automatically be taken against the cash value of the policy to pay the premium in the event the policy was about to lapse for nonpayment of premium.

Policy lapse during the life of the insured can cause the owner a single taxable event for the policy cash value growth accessed in or before the year of Policy lapse during the life of the insured can cause the owner a single taxable event for the policy cash value growth accessed in or before the year of policy cash value growth accessed in or before the year of lapse.

In other situations, though, the policy may have an outstanding loan, which potentially undermines the internal rate of return (as loan interest compounds) and can increase the risk that the policy lapses (which in the case of a policy with a loan can trigger a taxable event, in addition to lapsing the policy itself!).

The policy is terminated on occurrence of any of the following events: on payment of the Surrender Benefit, or Death Benefit or Maturity Benefit; after the end of 2 years from the date of lapse.

He further alleged, «We have observed that a few life insurance companies misuse the prescribed terms and conditions to avoid rendering the sum assured to the policyholder in event of reinstatement of policy after a lapse, only the only premium is refunded to the policyholder.»

In the event your policy lapses, you will be required to pay income taxes against any loan amount that exceeds the sum of the cash value and the amount of premiums that you paid.

Revival: In the event of premium not being paid even during the grace period, the policy would lapse.

The fact that a life insurance policy loan is really just a personal loan for which the life insurance policy is collateral also explains why the lapse or surrender of an insurance policy with a loan can trigger a taxable event.

If the policy holder does not make a selection, the terms of the policy will generally stipulate which option would go into effect, in the event that the policy lapses or is surrendered.

Withdrawals or loans in excess of the cost basis create a taxable event if the policy is later surrendered or lapses for nonpayment of premium (or insufficient cash value due to accrued interest on loans).