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defined loan value as the cash surrender value less loan interest
and fees associated with the policy. The policy defined cash
surrender value as the accumulated value less the surrender
charge and any policy loan debt. The policy required loan
repayment at any time before the lapse of the policy, but loan
interest was payable in advance, with any unpaid interest to be
added to the loan principal.
Between 1987 and 1992, petitioner paid premiums on the
policy as follows:
Year Amount Paid
1987 $6,260
1988 780
1989 520
1990 5,520
1991 1,000
1992 485
Total 14,565
Between December 1993 and October 1994, petitioner contacted
Pacific Life to request funds from the policy allegedly for a
downpayment on a home.2 Petitioner received the following
distributions:
Date Loan Interest Payment
Processed Amount Charged Amount
12/13/93 $5,159 $159 $5,000
2/17/94 2,044 44 2,000
5/17/94 1,513 13 1,500
10/3/94 7,716 316 7,400
Total 16,432 532 15,900
2 It appears that petitioner made his requests by
telephone.
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Last modified: May 25, 2011