Client Profile:

Existing Insurance
Loan + High Loan Interest Rate  


Client, age 65, has multiple whole life policies with accumulated loans. The client did not loan the cash out of the policies.  Rather, the loans are a result of automatic premium loans taken by the insurance carriers to cover missed premiums.  The loan rates are much higher than the dividend rates. The loans have become a drag on policy performance, which could cause a phantom income tax problem, if the policies lapse.