Course 2.2 · 50 minutes

The Tax Rules of Life Insurance: Cash Value, Loans, MECs, and 1035 Exchanges

Know exactly when life insurance money is tax-free and when it is not, so you can use cash value without a surprise bill.

Who it is for: Owners of permanent policies and anyone considering one.
Runtime: 50 minutes

Pre-order: this course is in development and appears in your portal the day it is released. Buy 5 or more and every course is 30% off.

See the full track See the full curriculum

Instant download after payment. Nothing is withheld for a later purchase.

What you receive

Policy Cash Value Tax Calculator that tracks basis, gain, and MEC status (Excel)
1035 Exchange checklist
Transfer-for-value decision tree
Questions to ask your agent before you sign: an attorney's checklist
The narrated lesson. 50 minutes, cued to the deck, with chapter markers by lesson. Emailed to you the day it publishes, at no extra cost.

What the course covers

01The definition of life insurance in the tax code and why it matters5 min
02Tax-deferred growth, withdrawals, and recovering your basis first7 min
03Policy loans: tax-free until the policy lapses6 min
04Modified endowment contracts: the seven-pay test and last-in, first-out taxation7 min
05Surrenders and 1035 exchanges: moving to a better policy without tax7 min
06The transfer-for-value rule and its exceptions5 min
07Worked example: loan versus withdrawal versus surrender on a 200,000 dollar cash value policy7 min
08Tricks of the trade: overfunded non-MEC design and partial exchanges3 min
09Mistakes and traps: lapsing with a loan outstanding and accidental MECs3 min

How it fits: Requires 2.1. Feeds 2.3, 2.4, and 2.6.

The standard every course holds

A narrated lesson of 45 to 60 minutes, produced as audio
A designed slide deck you download and keep
A computational workbook that runs the actual legal tests
A toolkit of checklists and protocols
A legal authority appendix carrying the two-pass vetting protocol

Written for a diligent reader with no legal education. Professionally narrated using a studio voice model of Brian T. Boyd. The course is recorded instruction, not a live consultation.

Where this course sits

Track 2: Life Insurance

This course is one step in a track built around a single outcome. See the full build order and the other courses that get you there.

Back to this track

Educational material from the private client curriculum of Brian T. Boyd. This is legal education for a general audience, not legal advice, and no attorney-client relationship is created by purchasing, viewing, or using it. Tax outcomes depend on your facts and your state.