Episode Details

This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. This episode covers content for the National Exam. In this episode you will learn: • Cash value growth within a permanent life insurance policy is tax-deferred until accessed. • Withdrawals follow the FIFO (First-In-First-Out) rule, where premiums are returned tax-free first. • Any withdrawal amount exceeding the policy's cost basis is taxed as ordinary income, never capital gains. • Policy loans are generally received tax-free while the policy remains in force, regardless of the cost basis. • A policy lapse with an outstanding loan triggers taxation on any loan amount that exceeds the total premiums paid. For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or Youtube Channel: https://www.youtube.com/@Open-exam-prep