Record each payment you send to the insurance company on a policy loan. IBC Tool lowers the balance of that loan by the amount you record. When the balance reaches zero, or goes below zero, the loan is paid off.
A loan payment is one of the four actions you take at the insurance company. Recording it here does not send the money. You still pay the insurance company yourself, unless you have already done that and you are only catching the records up. Until you send it, the Agenda keeps Make a loan payment on the list. Interest you still have to send uses that same item.
Steps
- Open Policies & Loans, select Actions, and then select Record Loan Payment. The screen is Record Loan Payment.
- If you already sent this payment to the insurance company, turn on I’ve already made this payment. See Already made, or still to make. The switch decides whether the Agenda reminds you to send the money.
- Enter the Payment Date.
- Under Loan Repayments, select each loan you are paying. IBC Tool starts with a selection for you. It fills in the amount for each loan that has a Payment amount or a PUA redirect, and it selects the loans with a payment due this month. Some lines start unselected:
- A quarterly or annual loan in a month with no payment due shows its amount but is not selected. Select it if you are paying it early. A quarterly or annual loan set to No specific day is never selected.
- A loan whose payment for this month you skipped with Skip this payment is not selected. That includes a skip you made earlier on the loan’s page for this month’s payment. Select it if you are paying it this month after all.
- A loan you recorded this month on Record Policy Loan with I’ve already made this month’s payment turned on is not selected. Leave it that way. That payment is already part of the Amount Remaining you entered, so recording it here counts it twice.
- A loan that already has a payment recorded this month is not selected, and its amount is blank. Select it and enter an amount if this really is another payment in the same month.
- Change an amount if you are paying something different. Clear each loan you are not paying this time. A selected line with an amount is a payment. An unselected line is skipped.
- If an amount is more than the loan has left, the screen asks where the extra goes. See Pay more than one loan. You cannot save until you answer.
- Optional: select Accrued interest to pay interest. See Interest. Interest is separate from the principal payment.
- Make sure the Total Payment is the amount you are actually sending, or the amount you already sent.
- Select Record Payment.
You can also open this screen from Record Loan Payment on the Actions page, or from Record on a loan payment reminder.
What you see next
The Payment Recorded screen opens. It shows:
- Loan Payments, with the amount applied to each loan.
- Updated Loan Balances, with what remains on each loan. A loan with nothing left shows Paid Off.
Select Record Another to record one more payment, or View Loans to go back to your loans.
On the loan, the payment shows as Pending until a snapshot shows that the insurance company posted it. Then it shows as Cleared. IBC Tool tries to match the payment to the next snapshot of the policy. See Record a snapshot. Pending means “recorded here, not yet confirmed by a statement or a policy summary.” It does not mean the payment failed.
Already made, or still to make
You already sent the payment
Turn on I’ve already made this payment. IBC Tool records the payment and adds nothing to the Agenda. Use this when you are catching up records for a payment the insurance company already has.
You will send the payment later
Leave I’ve already made this payment off. IBC Tool adds Make a loan payment of the amount to the Agenda. Send the payment in the online portal, or call the insurance company and ask them to take it. Then select Mark done on the item. See Use the Agenda.
The Agenda shows one item per policy, with the payments for that policy added into one total. The insurance company has one loan balance per policy, so it receives one payment per policy even when you are paying several of your own loans.
Pay more than one loan
Select more than one line to pay more than one loan in the same visit. The lines are grouped by policy. Because the insurance company gets one payment per policy, the Agenda shows one item per policy.
All loans in one recurring expense category show as one line, under the category name. The arrow marks the loan that receives the payment first. If the payment is more than that loan has left, the rest goes to the next loans in the category, in order. The amount IBC Tool fills in is the part of your paid-up additions payment that the category redirects, or the balance the category has left if that is smaller.
If an amount is more than the line has left, the screen asks Where should the extra go? The insurance company keeps a single loan balance for the policy, so extra principal has to land somewhere on that balance. Choose one:
- Another loan on the same policy. The extra pays down that loan, which pays down the same carrier balance.
- Leave it on the loan. The balance of that loan goes below zero. A balance below zero counts as paid off.
You cannot select Record Payment until you choose. If no other loan outside the line has a balance left, the screen shows Recording it leaves a negative balance here. The extra stays on this loan. There is nowhere else on the policy to put it.
A loan with a balance below zero is paid off. The steps in When a loan is paid off still apply.
Interest
The insurance company charges interest on the loan balance of each policy. When you have a recorded interest amount, the screen shows an interest line for that policy. Paying interest is not the same as paying principal. Read which line you are on.
Accrued interest
This line is interest you can still pay. It is not selected for you.
- To pay it, select the line and check the amount. IBC Tool divides the interest payment across the loans of the policy. The interest payment does not lower those loan balances. It pays the interest, not the principal.
- If the interest came due on the policy anniversary, check the Paid on date. It starts as the anniversary date. Change it if you paid on a different day.
- If you did not pay the interest, select Didn’t pay? Record the amount as capitalized. IBC Tool adds the interest to your loan balances. That matches what the insurance company does when unpaid interest is folded into the loan.
Interest charged
This line is interest from an annual statement. The insurance company has already added it to your loan balance, so you cannot pay it on this screen. The chance to pay it has passed. Select Record the amount as capitalized to add it to the loans in IBC Tool, so your balances include the interest the statement already charged.
When a loan is paid off
When a payment brings a loan’s balance to zero or below, IBC Tool does the steps below. It does the same steps when you set Status to Paid Off on the loan’s edit form, for example for a loan you repaid outside IBC Tool. Setting Status back to Active can ask for the redirect again on the Agenda, but it does not bring back the opening allocation or undo the Snowball move.
- Marks the loan Paid Off. On the Policies & Loans page, the loan leaves the active list of its policy. To see it again, select 1 paid off next to the policy’s Loans heading, or the same link with your count. It opens Paid-off loans on the policy page.
- Removes the opening allocation of the loan from its category, if the loan had one. That allocation existed so the category could cover the loan. Once the loan is gone, the category does not need it.
- Adds the loan’s Payment amount to the next loan, if Snowball is on for the policy. The next loan is the Repay on a schedule loan that has a Payment amount and the smallest balance. A loan in a recurring expense category is left out of this. That loan keeps the payment its funding rule already set.
A loan that used part of your paid-up additions payment
A loan in a recurring expense category, or a loan with a PUA Redirect, was using part of your paid-up additions payment as the source of the loan payment. You still sent each loan payment to the insurance company yourself. The redirect told you how much of the PUA payment to lower, so the cash was available for that loan payment.
When the loan is paid off, that part of the payment goes back to paid-up additions. The Agenda then shows Adjust annual PUA payment to the new, higher amount, with a note that the redirected amount is flowing back to PUA. The name uses your payment period. A monthly policy says Adjust monthly PUA payment.
- Raise the paid-up additions payment in the online portal, or call the insurance company and ask them to raise it. Use the amount on the Agenda item.
- Select Mark done on the item.
I’ve already made this payment belongs to the loan payment. It does not cover this PUA change. Select Mark done on the PUA item after you have made the change at the insurance company, even if the loan payment itself was already sent.
Two cases do not add a new item on this policy:
- The next loan in the recurring expense category is on the same policy. That loan keeps the redirect, so your PUA payment stays where it is. The next loan is the open loan of the category that you recorded first.
- You never marked the first PUA item done. IBC Tool removes that pending item, because the old instruction is out of date. If your payment at the insurance company is already the right amount, no new item appears. If another redirect on the policy changed the amount, a new item shows the new amount. Read that item before you call the insurance company. It may not match the number you remember.
When the next loan in the category is on another policy, the redirect moves to that policy. The Agenda shows an Adjust … PUA payment item for each policy: one raises the payment on this policy, and the other lowers it on the policy of the next loan. See When the loan is paid off.
For the full cycle of a recurring expense, from saving for the cost through the payoff, see Fund a recurring expense.
Loan payment reminders
A loan you repay on a schedule can show a reminder in This month’s loan payments, on the Agenda and under Review on the Policies & Loans page. The reminder is a prompt to record the payment. It is not itself a payment. Select Record to open Record Loan Payment. See Loan payment reminders for what Record and Skip this payment do.