Sentences with phrase «treatment of a policy loan»
The tax treatment of a policy loan is the same as a withdrawal:
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The 401 (k) treatment of loans prohibiting sharing in gains is in direct contrast to the advantage of borrowing from a mutual company offering a participating whole life insurance policy which will continue to pay dividends at normal rates regardless of outstanding loans.
A certain class of policies receives less favorable tax treatment than what is described above when taking loans and distributions and may be subject to a penalty tax.
Consult a tax advisor for additional information on the tax treatment of loans or withdrawals from a life insurance policy.
Consult a tax advisor for more information on the tax treatment of loans or withdrawals from a life insurance policy.
TUTORIAL: Introduction To Insurance Cash Value Loans If you need money for almost anything - paying taxes, supplementing retirement or college savings, funding a medical treatment or paying for a dream vacation, you can take a loan out of your life insurance policy's cash values in order to satisfy that need.
However, in reality the tax - free treatment of a life insurance policy loan is not actually a preference for life insurance under the tax code, but the simple recognition that ultimately a policy loan is just a personal loan between the life insurance company and the policyowner, for which the life insurance cash value is collateral.
In reality, though, the «tax - favored» treatment of a life insurance policy loan is not actually unique or specific to life insurance.