Pre - 1988 Life Insurance Policy

Regarding the post below a while back, can you give me more details on what to do with this policy. I have exactly what is being described below, but I can't find easy-to-understand details on it. If anyone can clarify, it would be greatly appreciated. I've heard everything from the fact that these things are goldmines to completely opposite.

Thanks.

http://forums.kiplinger.com/showthread.php?t=10053
...I think maybe what your FIL may have been referring to when he said the "Feds were going to outlaw them" is the preferred tax treatment of pre-1986 policies. Up to 1986, you could overfund life insurance policies without limits and take advantage of the tax-free growth and tax free distributions. You could literally hide your entire net worth inside one without ever being taxed! These policies are grandfathered up to 1986. After 1986, the IRS got wise and changed the treatment of life insurance policies and limited the amount of cash you could hide inside the policies. If your exceed these limits today, your policy becomes a Modified Endowment Contract, or MEC...

klackahamma, in pricespector's post (which you reference in your OP) he referred to another thread where i commented on policies of the type you think you have.

if you do, and if you are in a position to leverage it, then i think you have a GOLD-MINE! so, what do you do now?

frankly, several criteria need to be reviewed. i would recommend that you have your policy evaluated by a competent professional. in this case, ask your potentially competent professional:

1. what is the difference between a cash value life policy issued in 1985 and one issued in 2000? if they start talking about this issue, i think you probably have someone who knows what they are looking for to evaluate your situation adequately.

2. ask to see their HP12. its simply a calculator that does everything financial that is not simple to do.

that all said, i also want to question you. what is it that you HOPE this product might be able to do for you? and do you have the financial resources to leverage it INTO the gold normally taken from a mine?

i might also be highly interested in getting an update from the insurance company you got it from in the first place. they may be a great place to start your information gathering.

finally, lets assume you do in fact have a gold mine, and you have the resources to really take advantage of it. PLEASE ensure that it is a quality mine. if you have this policy with anything less than an "investment grade" insurance company, be very careful about socking a tonne of money into it.

please let us know what you find out and what you do with the information you get here!

<------- Loves his Hp12c