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Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3151
Experience:  EA, CEBS - 35 years experience providing financial advice
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Is an insurance policy loan taxable

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Submitted: 8 years ago.
Category: Tax
Expert:  Bill replied 8 years ago.

A loan from the cash value in a life insurance policy is not taxable as long as the policy is not a Modified Endowment Contract (MEC). A MEC is a policy where the premiums paid in the first 7 years are in excess of the amount needed to maintain the death benefit.


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