| Policy loans and
withdrawals will reduce the
policy’s cash value and death benefit and may result in a taxable
event. Surrender charges may reduce the policy’s cash value in the
early years. Withdrawals up to the basis paid into the contract and
loans thereafter will not create an immediate taxable event, but
substantial tax ramifications could result upon contract lapse or
surrender. Policy loans will be taxed as ordinary income if the policy
is allowed to lapse. It is possible that coverage will expire when
either no premiums are paid following the initial premium, or
subsequent premiums are insufficient to continue coverage. |