-$25,000 a year for 10 years
-7.1% crediting rate
-Borrowing from age 81-120
-Of course the company of choice is one of my least favorite (MN Life).
The agent was given two illustrations; one where you borrow from the policy in year two to pay income taxes and one not. The illustration where you yank money out in year two to pay income taxes is particularly abusive.
Amount of borrowing?
$20,459 a year (normal illustration)
$26,585 a year (borrowing in year two to pay income taxes)
Early variable loans can be catastrophic if the market goes flat. The policy instead of crediting 7.1% as budgeted will credit zero. That means there will be a negative loan arbitrage in flat or negative years.
Roccy DeFrancesco, JD