1 Outstanding loans and withdrawals will reduce policy cash values and the death benefit and may have tax consequences. Basis may be withdrawn first, up to the point of gain, income tax‐free. Thereafter, loans may be taken. Distributions from a Modified Endowment Contract "MEC" (such as loans, withdrawals, and collateral assignments) are taxed less favorably than distributions from policies that are not MECs to the extent there is gain in the policy. For distributions from a MEC prior to age 59½, a federal income tax penalty may apply to the extent there is gain in the policy. However, death benefits are still generally received income tax-free pursuant to IRC §101(a). The death benefit will be reduced by any withdrawals or loans (plus unpaid interest). Clients should consult a tax advisor.
2 For employer-owned contracts issued after August 17, 2006, death proceeds will be subject to income tax except where specific employee notice and consent requirements are met, and certain exceptions apply.
Neither Prudential nor its representatives provide legal or tax advice; clients should seek the advice of a tax or legal professional.
Life insurance is issued by The Prudential Insurance Company of America, Pruco Life Insurance Company (except in NY and/or NJ), and Pruco Life Insurance Company of New Jersey (in NY and/or NJ). All are Prudential Financial companies located in Newark, NJ.
Created Exclusively for Financial Professionals. Not for Use with Consumers.
For Compliance Use Only: 1016696-00002-00 Ed. 10/2020