Understanding Policy Loans

This screen provides a visual storyboard to explain the process of leveraging policy loans to take advantage of opportunities as they arise. The first three steps in the storyboard set the initial assumptions of Crediting Rate, Loan Rate and Expected Return on the opportunity. Subsequent steps reveal sections of the process diagram so that they can be explained.

Important:

This module is intended to demonstrate how a client might be able to find capital using the Private Reserve Strategy® to take advantage of a financial opportunity, such as purchasing additional equipment for a business, finding the down-payment to purchase an investment property, etc. This strategy should never be used as a source for other investments such as securities or to purchase other life insurance or annuity products.

No script is provided for this screen.

The taxable growth is calculated as follows:

Expected Return (after tax) - Loan Rate

The taxable growth (including investment expense tax deduction) is calculated as follows:

Taxable Growth + (Loan Rate * Tax Rate)