Whole Life Withdraw to Basis

[SamIam]

I don't sell whole life but someone told me if the loan says withdraw to basis that's bad because it drags the policy. Can someone explain what he is talking about.

 

[pfg1]

Withdraw to basis is not a loan. A loan is a loan. Withdraw to basis means you are withdrawing out some of the cash value (what you paid in is the basis) from the policy. Lowering the cash amount by "x" will adjust the amount of cash you have left, death benefit, and future dividends - based on how much you withdraw. (assuming div paying mutual) Cash withdrawals from the policy are not taxable up to the basis.
They may refer to drag meaning over time withdrawing the cash down will likely yield lower future performance in the policy. Which is better withdrawals or loan can vary.

 

[BYSFG]

What pfg said. Simply put, are you you planning on paying it back? Such as policy loan vs. a loan else where.

If you don't plan to repay it back then withdrawal may be the option looked. Basis being up to premiums that you have paid in.

Either way you look at it, there are "consequences" in some sense, impacting the policy. The term being used loosely here.