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Bill is in a serious pinch and would like to take a loan against the value of his annuity. He is still in the accumulation period. Which of the following is true?
A. It is strictly prohibited by the IRS.
B. Many insurance companies allow it, but he will be subject to a 10% early withdrawal penalty.
C. Many insurance companies allow it, but it will be considered a distribution and therefore is taxable. A penalty may also apply.
D. Many insurance companies, allow it and there will be no tax or penalty implications provided it is repaid during the accumulation period.