Unpacking the IUL marketing plague
January 23, 2023 by Daniel M Yerger
Wink’s Note: So interesting that Daniel Yerger, MBA, CFP®, ChFC, AIF, CDFA just published an article that we have been discussing on my LinkedIn feed.
Indexed life and Tik Toks.
He takes issue with the videos, just as most of us do. He makes some very good points in this article.
I do want to make one correction: loans on cash value life insurance do NOT need to be repaid. They will eat-up the cash value of the life insurance, if the loan interest is not paid each year. AND- loans will certainly be deducted from the death benefit that is payable to beneficiaries. However, loans on life insurance do not HAVE TO be repaid.
That said, if the loan balance exceed the cost basis of the policy upon lapse, and there is not some sort of overloan protection rider to prevent it, this will cause a taxable event.