How can I not repay loan to AXA on life insurance policy?
How can I not repay loan to AXA on life insurance policy?
I have a life insurance policy and I owe $29,000 to the company (AXA)
An agent hs told me I can do a 1035 exchange and wipe-out the loan. How can it be that I would not have to repay the money? Would I have to pay it to the new insurance company?
An agent hs told me I can do a 1035 exchange and wipe-out the loan. How can it be that I would not have to repay the money? Would I have to pay it to the new insurance company?
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One Response
1.31.2010
Best Answer – Chosen by Voters Be very careful with this. Your agent is essentially offering to cash in your policy and replace it with another one. You are taking out the cash value of the policy for enough to pay the loan. You wouldn't have to repay the loan, but the value of your insurance policy would go down.It might be ok, if you have had the policy for a while. But, if it is not handled exactly as the IRS requires, it can become income to you, and there will be a big tax bill attached to it. Also, ask your AXA agent what the cash surrender value of the existing policy is – that is an important number when planning these exchanges.Here is a good article about the exchanges.http://www.immediateannuities.com/librar…Seek help from a professional insurance advisor and personal financial planner before you do this.