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Overloan protection agreement

Our Overloan Protection Agreement (OPA) can protect your clients' policy from termination due to a policy loan — even if the cash value is insufficient to cover policy charges. This agreement also protects against incurring a taxable gain if the loan balance exceeds the policy’s cash value and is not a Modified Endowment Contract (MEC).


  • Protects the policy from termination due to a policy loan – even if the cash value is insufficient to cover policy charges
  • Protects against incurring a taxable gain if the loan balance exceeds the policy’s cash value and is not a MEC


  • Insured must be at least 75 years old to exercise the agreement
  • Policy must be in force a minimum of 15 years
  • The sum of all partial surrenders must be greater than or equal to the sum of premiums paid
  • The client must contact Securian Financial in writing to exercise the agreement

How it works

To prevent an overloan situation, your client must contact us in writing and ask to exercise the OPA. Once the OPA is exercised, it will essentially lock down the policy to prevent loans or policy charges from being taken that would exceed the policy’s available cash value.

  • Upon exercising the OPA, we will assess a one-time charge against the policy’s cash value. There are no additional ongoing charges for this agreement.
  • After the OPA has been exercised, all other agreements, with the exception of Income Protection Flex Agreement (IPA Flex) , will be terminated and no additional changes can be made to the policy – including making premium payments or taking additional policy loans or partial surrenders.
  • The policy will remain in force until the insured’s death, at which time the death benefit will pay off the loan balance tax-free, and the remainder will be paid to beneficiary(ies).

Next steps

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Additional agreements may be available. Agreements may be subject to additional costs and restrictions. Agreements may not be available in all states or may exist under a different name in various states and may not be available in combination with other agreements.

The tax treatment of the Overloan Protection Agreement is uncertain and it is not clear whether the Overloan Protection Agreement will be effective to prevent taxation of any outstanding loan balance as a distribution in those situations where Overloan Protection takes effect.  Anyone contemplating exercise of the Policy's Overloan Protection Agreement should consult a tax advisor.

Life insurance products contain fees, such as mortality and expense charges (which may increase over time), and may contain restrictions such as surrender charges. Variable life insurance products contain fees, such as mortality and expense charges, and may contain restrictions, such as surrender periods. There may also be underlying fund charges and expenses, and additional charges for riders that customize a policy to fit individual needs. Charges and expenses may increase over time. The variable investment options are subject to market risk, including loss of principal.

The Policy Design chosen may impact the tax status of the policy. If too much premium is paid, the policy could become a modified endowment contract (MEC). Distributions from a MEC may be taxable and if the taxpayer is under the age of 59½ may also be subject to an additional 10% penalty tax. 

Policy loans and withdrawals may create an adverse tax result in the event of lapse or policy surrender, and will reduce both the surrender value and death benefit.  Withdrawals may be subject to taxation within the first 15 years of the contract. Clients should consult their tax advisor when considering taking a policy loan or withdrawal.

This information should not be considered as tax or legal advice. Clients should consult their tax or legal advisor regarding their own tax or legal situation.

Insurance products issued by Minnesota Life Insurance Company / Securian Life Insurance Company

Policy form numbers:  ICC15-20003, 15-20003 and any state variations; ICC16-20081, 16-20081 and any state variations; SL-09-911.31; ICC19-20204, 19-20204 and ay state variations; ICC18-20150, 18-20150 and any state variations; ICC18-20149, 18-20149 and any state variations; 18-20155

The information presented above is solely intended for use by financial professionals. Such information is not intended for public consumption or dissemination.

For financial professional use only. Not for use with the public. This material may not be reproduced in any form where it is accessible to the general public.

DOFU 12-2022