Tax Sensing

Either FIFO or LIFO tax sensing of taxable policy distributions is available. On FIFO taxed policies, policy loans are tax free.

If your policy data contains loans, we will not process the InsMark illustration using LIFO. Loans under LIFO are so inefficient, we eliminate their use in InsMark proposals. Traditionally, policy loans have been used to avoid taxation of policy distributions in excess of cost basis. When loans do not produce tax free cash flow, withdrawals and/or dividend surrenders should be used to avoid unnecessary loan interest.

Further, loan interest added to policy loans is an additional taxable event under the LIFO rules. Income tax, in the absence of any cash flow to pay it, is unacceptable to most policyholders. LIFO taxation settings will accommodate illustrations utilizing withdrawals or dividend surrenders (or no cash flow at all).