- 4,621
It is tax-free money that is not required to be paid back.
isnt it paid back at lapse/surrender or death? The carrier has an asset on their books of the outstanding loan. At time of lapse/surrender or death, they go back to the clients cash value or death benefit & collect the money they are owed.
For the last 10-15 years with bank rates at 2-4%, wouldnt some of those clients that are being charged 5-7% on loans from old policies have better off borrowing tax deductible bank money (assuming they could qualify for the bank loan, etc). Again for those that cant qualify for a bank loan or rate have jumped now on bank loans.