How the IRS treats life insurance policy loans

Thinking about borrowing money from your life insurance policy?

Before you do, you’d better ask yourself these three important questions…

1. Am I using the loans for a business purpose?
2. Am I repaying the loans?
3. If I’m not repaying the loans, what happens when the money I’ve borrowed terminates my policy?

If you haven’t answered these questions and thought about the relevant tax implications, you could wind up with a big, nasty tax bill. Want to find out more? Read my new article titled Tax Tips: Big Mistake with Life Insurance Policy.

Three ways our fact-filled article can help you:

1. We’ll tell you what Boyd and Janice Black learned the hard way. Because the blacks didn’t know the tax law, they believed that the unpaid interest on their insurance policy loans was not taxable. Wrong! As a result of their errors they wound up owing over $30,000 in extra taxes. This won’t happen to you if you read the full article.
2. You’ll learn how to avoid unpleasant surprises. Want to make sure your life insurance policy works the way you want it to? Then keep 1099-R “taxable events” in mind when you inspect the cash value and loan balances of your life insurance polices. We’ll explain everything when you read the full article.
3. We’ll explain a very important fact. Simply put, the interest on a loan, if it’s deductible, is deductible when it’s paid, not when it’s added to the policy loan. Okay. So it’s not so simple. But we’ll make everything crystal clear (I promise!) when you read the full article.