Navreet, age 62, owns a universal life (UL) insurance policy with a face value of $350,000. The policy is based on her own life, has an adjusted cost basis (ACB) of $78,000, and a cash surrender value (CSV) of $174,000. Navreet retires and decides to structure a collateral loan from a third party lender for $100,000, to be paid to her in instalments of $10,000 per year for the next 10 years. Which of the following statements about Navreet's loan is CORRECT? There will be no tax consequences for Navreet. Navreet must declare $10,000 income in the first year. The ACB of the policy will be increased to $88,000 in the first year. The CSV of the policy will be reduced to $74,000