A Complete Guide to the Modified Endowment Contract (MEC)

A Complete Guide to the Modified Endowment Contract (MEC)

What is a Modified Endowment Contract? A Modified Endowment Contract (MEC) is a life insurance policy that fails the 7-pay test established by the Tax and Miscellaneous Revenue Act of 1988 (TAMRA). Failure of this test reclassified the life insurance policy, which comes with several changes to the taxation of the insurance contract. It’s important …

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What is Included in a Whole Life Insurance Policy Illustration?

whole life policy illustration details

A whole life insurance policy illustration will include details, such as the life insurance coverage amount, the annual premium requirement, the guaranteed cash value, current dividend payment, and the year-over-year increase in cash value. There are also times that you might see a column on one of the internal pages of a whole life policy …

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What is Bank On Yourself®?

What is Bank On Yourself?

Bank on Yourself®  is the creation of Pam Yellen and is a process of using whole life insurance as a means to finance major purchases.  The claims made by Bank on Yourself® suggest that following the program will unlock hidden wealth secrets employed by savvy investors and business people. But does it work? We get …

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How to Achieve Paid-up Status on a Whole Life Insurance Policy

How to Achieve Paid-up Status on a Whole Life Insurance Policy

Whole life insurance paid-up status occurs when you do one of two things.  First, you reach paid-up status when you make the required number of premium payments stipulated in the insurance contract.  Second, you can electively create a paid-up whole life policy by triggering the reduce paid-up nonforfeiture benefit of a whole life policy. How …

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