- 1 Withdrawals are generally taxable to the extent they exceed basis in the policy. Loans are charged interest; they are usually not taxable. Loans that remain unpaid when the policy lapses or is surrendered while the insured is alive will be taxed immediately to the extent of gain in the policy. Unpaid loans and withdrawals reduce cash values and death benefits; may reduce the duration of the guarantee against lapse, which may lapse the policy; and may have tax consequences. For policies that are Modified Endowment Contracts (MECs), distributions (including loans) are taxable to the extent of income in the policy; an additional 10% federal income tax penalty may apply. Clients should consult their tax advisor for advice about their own situation.
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: 1012632-00001-00