One of your customers purchased a variable life insurance contract through your firm. after 14 years, he had deposited $15,000 in premiums, and his death benefit had grown to $80,000. shortly after taking out a loan against cash value of $10,000, he was killed in an automobile accident. what will be the consequences of this situation to the death benefit?

Question

Rey Jefferson

Business

25 September, 01:39

One of your customers purchased a variable life insurance contract through your firm. after 14 years, he had deposited $15,000 in premiums, and his death benefit had grown to $80,000. shortly after taking out a loan against cash value of $10,000, he was killed in an automobile accident. what will be the consequences of this situation to the death benefit?

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Daniella Nicholson · Answer 1

Given that o ne of your customers purchased a variable life insurance contract through your firm. after 14 years, he had deposited $15,000 in premiums, and his death benefit had grown to $80,000. shortly after taking out a loan against cash value of $10,000, he was killed in an automobile accident.

The consequences of this situation to the death benefit is that:

His beneficiary will receive the death benefit minus the value of the loan.

His beneficiary need not pay taxes on the death benefit.