Helpful Hints
  • (1) You can search the entire content of Dean’s by phrase or by individual words. Just type your keywords into the search box and then pull down the search icon on the right and choose the option you need: search by word or by phrase or reset the content.
  • (2) Double click on a word in the content of a definition, and if the word is listed as a keyword in Dean’s, it will look that word up.
  • (3) You can use the search function to help jump the scrolling function. Simply type the first 2-3 letters into the search box then hit enter on your keyboard and the scroll will go to those Keywords that begin with those letters and allow you to scroll from there.

 Insurance policy loans are unique because the borrower assumes no personal liability to repay the principal or to pay interest on the amount borrowed. Such loans are based on the reserve value of the insurance policies involved. If either the principal or the interest is not repaid, it is merely deducted from the reserve value of the policy. Since the insurance company 'never advances more than it already is absolutely bound for under the policy, it has no interest in creating a personal liability.' Orleans Parish v. N.Y. Life Ins. Co., 216 U.S. 517, 522 

Courts have held that interest on an insurance policy loan may be deducted so long as it is actually paid or accrued by the policyholder. If such interest is not paid but is allowed to be added to the principal amount of the loan, the amount of the interest is not deductible. Nina Cornelia Prime, 39 B.T.A. 487; Albert J. Alsberg, 42 B.T.A. 61. 

In Agnes I. Fox, 43 B.T.A. 895, it was held that the assignee of an insurance policy subject to a loan made prior to the assignment could deduct interest on that ...

Register or login to access full content