Article Date:
April 2019


Word Count:
632

 

 

Life Insurance Policy Loan: A Tax Nightmare


Bruce Brown fell into the life insurance policy loan trap.

 

Mr. Brown, a commercial litigation attorney, purchased a life insurance policy from Northwestern Mutual Life Insurance Company. For the first six and a half years, he paid the insurance premiums by check. For the next 15 1/2 years, he paid the premiums by borrowing at 8 percent interest against the policy’s cash value.

 

Because of the borrowing, the Year 22 annual interest accrual was twice the insurance premium due. This was a ... Log in to view full article.

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