What Is a Modified Endowment Contract (MEC)? 7-Pay Test
If you’ve recently opened your mail to find a technical, slightly ominous warning letter from your life insurance company stating that your policy is about to become a “Modified Endowment Contract,” your first reaction was probably panic. The phrase sounds like a penalties-laden breach of contract, or a sign that you broke your policy. It […]
Tired of Paying Your Life Insurance? Your 3 Practical Options
The Short Answer: What Does It Mean to Keep, Surrender, or Replace a Life Insurance Policy? Keep means continuing to pay premiums — or restructuring the policy (lower death benefit, paid-up status) so it survives without the same payment. Surrender means telling the insurance company you’re done. They close the contract and cut you a […]
Life Insurance Loan vs. Withdrawal: Which Is Better for Your Cash Value?
You have cash value built up in your life insurance policy. You need money. And now you’re staring at two options that look almost identical — a policy loan and a partial withdrawal — trying to figure out which one to choose and why it matters. You’re in the right place. This is exactly the […]
Are Death Benefits Taxable? Life Insurance, MEC & Annuity
In a companion article, I walked through what happens when you cash in a policy during your life — the surrender, the gain, the loan that can quietly turn into a tax bill. That was the owner’s question: how much do I keep if I cash this thing in? Now I want to flip the […]
What Are the Taxes When You Cash In a Life Insurance or Annuity Policy?
When I first started in this business, my wife’s mother had a whole life policy with a nice chunk of cash value sitting inside it. She needed some money, and I told her what I’d tell anyone: you don’t have to cash it in. You can borrow against it, pay it back over time, and […]
Annuities versus Investing: The Balance of Risk and Reward in Retirement Planning
https://youtu.be/JSaZtAjU4d8 Annuities are a popular yet controversial investment choice for anyone seeking income from their money. They are a contract between an annuity owner and an insurance company in which the owner pays a lump sum or a series of payments over time in exchange for guaranteed future income. These payments can last for a […]