Kategoriler
Monthly Installment Payday Loans

Modified Endowment Contract (MEC) Explained. Tax Advantage Of Life Insurance Policies Contracts

Modified Endowment Contract (MEC) Explained. Tax Advantage Of Life Insurance Policies Contracts

A modified endowment agreement (commonly known as a MEC) is just a taxation certification of a life insurance coverage which includes been funded with increased cash than permitted under federal tax legislation. A life insurance coverage which becomes a MEC is not any longer considered life insurance coverage by the IRS, but alternatively it really is considered a modified endowment agreement. Being considered a MEC changes the purchase of taxation in the contract for the money withdrawn, and might penalize the full term life insurance owner for withdrawals before age 59.5. Really a life insurance coverage agreement which turns into a MEC is addressed such as a non qualified annuity by the IRS for taxation purposes before the insured persons moving.