Why are there two different insurance policies involved?
The Mana loan uses both an annuity and a universal life insurance policy. The annuity is purchased with a portion of the loan funds to pay the premiums on the Universal life policy. Therefore, the homeowner does not need to pay any insurance premiums other than those from the loan proceeds. There is an immediate cash value from the policy that benefits both the homeowner and the lender. In addition, the homeowner will receive tax-favorable policy distributions during the contract owner’s lifetime and the program has been structured to avoid any additional taxation.
