Minimum Deposit Rescue

Technique designed to permit the exchange of a life insurance policy that has an outstanding loan charged against it for another life insurance policy on a tax-free basis. The procedure is for the insurer to issue a new policy subject to a loan in the amount equal to the outstanding loan on the old policy. If the new policy so issued is of the form of a Flexible Premium policy such as Universal Life the loan from the old policy can be replaced by the new policy assuming the loan.