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 Posted: Fri Jul 17, 2009 11:30 am Post subject: Taking a loan against an endowment policy.. |
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| I want to know that what are the eligibility criteria for taking a loan against an endowment policy?? |
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Tulip
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| Posted: Fri Jul 17, 2009 12:25 pm Post subject: |
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| It depends on the specifics of the contract. |
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InsuranceExpert
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| Posted: Tue Oct 19, 2010 7:47 pm Post subject: Greetings from Mark! |
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| Quote: | | Never believe in mirrors or newspapers. ~Tom Stoppard |
Greetings,
Mark
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theMarkoooh
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RupertWBradson
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| Posted: Sat Oct 23, 2010 11:08 pm Post subject: |
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Generally, because an endowment falls under the banner of "Modified Endowment Contract" created by Congress in the Reagan era, taking a loan from an endowment contract might not be possible, but if it is, it creates a taxable event. It depends, in large part as to the date the contract was created. If created any time after 1988, the contract is a MEC, and touching the money is a taxable event (Gain before Principal, and subject to the age 59-1/2 early withdrawal penalty tax). If,, for some reason, the endowment holds "qualified plan assets" from an IRA (which would be highly unusual), any attempt to "borrow" would force the entire account balance to be distributed, and subject to taxes and penalty taxes in the year of distribution.
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MaxHerr
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| Posted: Mon Nov 01, 2010 2:14 am Post subject: |
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Max, I don't know too many people who refer to MEC's as endowment contracts, it's tough to find people who know their contracts are MECs. However, I do know of many people who--years ago when they were sold--refer to their endowment contracts as such. Endowment contracts were very populat during the later half of the last century up until the late 80's/early 90's and beyond.
The question here likely pertains to one of these contracts. What's the eligibility, probably something to the effect of hacing loanable cash value in the conracts (which is essentially any cash value in the contract) and have a contracts that has been in force for at least a year (which would be almost certain given an endowment contract).
Of course, when in doubt check with your agent. But of course, you are here on the internet, which leads me to assume you haven't spoken with an agent in some time. Second best idea is to contact the company that issued and maintains your contract, they'll know.
Of course, another good idea would be to find an agent (but be guarded towards recommendations to replace your contract) who could further work with you on topics such as this. That agent could also assist with this question. |
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BNTRS
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| Posted: Wed Nov 10, 2010 5:07 pm Post subject: |
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| Quote: | | My grammar has a the whole kit to be desired, but working on it. |
You can said that once after saiding it before. We'd like to exculpate you soon, but may have to excommunicate it first.
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MaxHerr
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