ATTORNEY NEWSLETTER
Dangers of Premium Payment Loans
Tax Consequences
Borrowing against a whole life insurance policy can have serious economic and tax consequences down the road if policyholders are not careful. Insurance agents use the fact that policyholders can borrow against the cash value of whole life policies as part of their sales pitch. The selling point encourages the client to view a whole life policy as a private bank where the policyholder can borrow money from time to time. Our litigators urge caution when borrowing against any whole life policy as there may be economic consequences, like big tax bills, down the road whenever you borrow. If you’re over 60 and live in California and have suffered a loss on a whole or universal life insurance policy, call the insurance and financial elder abuse attorneys at Evans Law Firm, Inc. today at 415-441-8669.
Often, policyholders borrow against the cash value in whole life policies to make their ongoing premium payments. The borrowing keeps the policy in force until the cash value is reduced to zero by the premium payments and interest incurred. In other instances, policyholders may borrow for college tuition money for their children or other expenses. Unfortunately, the loans are often forgotten until the policy coverage is lost entirely and a large taxable gain is created (by the write-off of the amount borrowed).
In short, policy loans can end up creating huge economic problems for policyholders and are not easily fixed. Agents seldom monitor policies once the policies are sold so the policyholder may be in the dark as to the ultimate consequences of policy loans. Typically, agents do not fully explain how policy loans work at the time of sale either. Before borrowing against any whole life policy, even for premium payments, consult your tax advisor.
Contact Us
If you are over 60 and surrendered a whole life or universal life insurance policy in California, contact Ingrid M. Evans and the other Evans Law Firm, Inc. insurance attorneys for a free review of your policy at (415) 441-8669, or by email at info@evanslaw.com. Our attorneys have experience with complex indexed universal and whole life policies and annuity contracts and cases against large insurance companies. We can help guide your case through a jury trial or toward an equitable settlement. We handle cases involving physical and financial elder abuse, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.
Some of the leading providers and distributors of whole and universal life insurance and annuities in California are listed below. We are not in any way suggesting that any of these carriers or distributors has done anything wrong or offers unsuitable variable annuities. Rather, the list is provided solely as a reference for our readers.
AIG/American General Life Insurance Company
Allianz Life Insurance Company of North America
American Equity Investment Life Insurance Company
American General Life Insurance Company/AIG
American International Group, Inc. (AIG)
American National Life Insurance Company
Americo Financial Life and Annuity Insurance Company
Ameriprise Financial/RiverSource Life Insurance Company
Ameriprise Financial/Securities America, Inc.
Athene Annuity & Life Assurance Company
Athene Annuity and Life Company
Athene USA
Aviva Life Insurance Company
AXA Equitable Financial Services, LLC
AXA Equitable Life Insurance Company/AXA US
AXA Advisors, LLC
Bankers Life Insurance and Casualty Company
Berkshire Hathaway Group
Berkshire Hathaway Life Insurance Company of Nebraska
Brighthouse Financial, Inc./MetLife
Citigroup Global Markets, Inc.
Crump Life Insurance Services, Inc.
CUNA Mutual Group/CMFG Life Insurance Company
Delaware Life Insurance Company
EquiTrust Life Insurance Company
Fidelity & Guaranty Life Insurance Company
Forethought Life Insurance Company/Global Atlantic Financial Group
Genworth Financial, Inc.
Genworth Life and Annuity Insurance Company
Genworth Life Insurance Company
Global Atlantic Financial Group/Forethought Life Insurance Company
Guardian Life Insurance Company
Guggenheim Partners, LLC
Guggenheim Partners/Security Benefit Life Insurance Company
ING USA Annuity and Life Insurance Company
Jackson National Life Insurance Company
John Hancock Life Insurance Company
Legacy Marketing Group
Lincoln Benefit Life Company
Lincoln Financial Group
Massachusetts Mutual Life Insurance Company
Merrill Lynch Life Agency Inc.
Metlife/Metropolitan Life Insurance Company/Brighthouse Financial, Inc.
Minnesota Life Insurance Company
National Life Group
National Life Insurance Company/Equity Services, Inc.
National Western Life Insurance Company
Nationwide Life Insurance Company
New York Life Insurance Company
North American Company for Life and Health Insurance
Northwestern Mutual Investment Services, LLC
Northwestern Mutual Life Insurance Company
Northwestern Mutual Wealth Management Company
Oxford Life Insurance Company
Pacific Life Insurance Company
Principal Financial Group
Prudential Life Insurance Company
Raymond James Insurance Group
Reliance Standard Life Insurance Company/Tokio Marine Group
RiverSource Life Insurance Company/Ameriprise Financial
Securities America, Inc./Ameriprise Financial
Security Benefit Corporation
Security Benefit Group, Inc.
Security Benefit Life Insurance Company/Guggenheim Partners
Security Investors, LLC
Security of Denver Life Insurance Company/Voya
The Standard Life Insurance Company
Symetra Financial Corporation
Symetra Life Insurance Company
Transamerica Life Insurance Company
The United States Life Insurance Company in the City of New York
Unum Life Insurance Company of America
USAA Life Insurance Company
The Variable Annuity Life Insurance Company
Voya Financial Advisors
Voya/Reliastar Life Insurance Company
Wells Fargo Advisors
Western & Southern Financial Group
The Western & Southern Life Insurance Company
World Financial Group Insurance Agency, Inc.
