IUL Wash Loans and the IRS Regulation

[Justin Bilyj]

Anyone (Brandon) know any current discussions or possible committee legislation in the past 3 years that pertains to the wash loans and their tax-free access to cash value?

Not wondering if the cv in a life policy will be taxed (thats always been a threat), do you ever see wash loans going away?

This is a hypothetical conversation about IUL's and accessing them in a tax free manner.
Thank you for any insight!

 

[BNTRS]

Anyone (Brandon) know any current discussions or possible committee legislation in the past 3 years that pertains to the wash loans and their tax-free access to cash value?

Not wondering if the cv in a life policy will be taxed (thats always been a threat), do you ever see wash loans going away?

This is a hypothetical conversation about IUL's and accessing them in a tax free manner.
Thank you for any insight!

Nope, not aware of anything and not sure why there would be an issue. Wash loans have existed on both current assumption and VUL for quite some time, so IUL's having it doesn't appear particularly threatening.

As far as moving in taxing life insurance cash values direction, I seriously doubt it. IFA-PAC and NAIFA love to spin this story to raise money, but if you think of the amount of revenue premium taxes bring in for state governments, the lobby that could assemble to ensure that life insurance continues to be a coveted asset that can bring in loads of premium is likely to overwhelm any attempt at a quick fix for cash at the Federal level.

 

[Justin Bilyj]

Thank you for the response Brandon.

Do you know how much tax revenue the taxes on premiums brings in?

 

[BNTRS]

Thank you for the response Brandon.

Do you know how much tax revenue the taxes on premiums brings in?

The data is a little old, now:

Are They Going to Start Taxing Life Insurance?

But as of 2010 it was $16.5 billion dollars.

Scroll almost to the bottom, for the picture with that data.