1035 Exchange Life Insurance: Section 1035 Exchange Rules & Steps
The Short Answer: What Is a 1035 Exchange for Life Insurance? A 1035 exchange lets you move the cash value of a life insurance policy directly into a new life insurance policy, an annuity, or a qualified long-term care policy — without paying tax on any gain in the old contract. The rule comes from […]
Tired of Paying Your Life Insurance? Your 3 Practical Options
The Short Answer: What Does It Mean to Keep, Surrender, or Replace a Life Insurance Policy? Keep means continuing to pay premiums — or restructuring the policy (lower death benefit, paid-up status) so it survives without the same payment. Surrender means telling the insurance company you’re done. They close the contract and cut you a […]
Life Insurance Loan vs. Withdrawal: Which Is Better for Your Cash Value?
You have cash value built up in your life insurance policy. You need money. And now you’re staring at two options that look almost identical — a policy loan and a partial withdrawal — trying to figure out which one to choose and why it matters. You’re in the right place. This is exactly the […]
Cost of Insurance Charges: The Hidden Math Behind Your Cash Value
Quick Answer: A cost of insurance (COI) charge is the monthly fee your life insurance carrier deducts directly from your policy’s cash accumulation account to cover the actuarial risk of paying your death benefit. In Universal Life policies — Fixed UL, Indexed UL, and Variable UL — this charge is visible, unbundled, and recalculated every […]
Does the Infinite Banking Concept Actually Work?
I sell whole life insurance. I have for 23 years. So when I tell you the Infinite Banking Concept doesn’t do what its promoters say it does, I need you to understand: I wanted it to be true. When I first had it explained to me — borrow from your policy, keep earning interest on […]
How Do Life Insurance Loans Work — and Are They Better Than Borrowing Against Other Assets?
Borrow your own money. Keep earning interest while you spend it. Pay yourself back on your own schedule. Create tax-free retirement income. Be your own bank. If you’ve spent any time around life insurance, you’ve heard the pitch. It comes with confident names — infinite banking, loan arbitrage, becoming your own banker — and it […]
Are Death Benefits Taxable? Life Insurance, MEC & Annuity
In a companion article, I walked through what happens when you cash in a policy during your life — the surrender, the gain, the loan that can quietly turn into a tax bill. That was the owner’s question: how much do I keep if I cash this thing in? Now I want to flip the […]
What Are the Taxes When You Cash In a Life Insurance or Annuity Policy?
When I first started in this business, my wife’s mother had a whole life policy with a nice chunk of cash value sitting inside it. She needed some money, and I told her what I’d tell anyone: you don’t have to cash it in. You can borrow against it, pay it back over time, and […]