The cash value will still grow tax deferred and your beneficiaries will still receive the death proceeds income tax free

The cash value will still grow tax deferred and your beneficiaries will still receive the death proceeds income tax free

What is a Modified Endowment Contract (MEC)? The primary purpose of life insurance has always been to help solve the financial needs caused by premature death. Because of its social value, the law has historically given preferential tax treatment to life insurance – cash value grows tax deferred, lifetime distributions are treated as a nontaxable return of basis first and then as taxable gain, loans are not taxed when taken and death proceeds are generally received income tax free to the beneficiary.

However, any loans or withdrawals from a MEC will be taxed at the time of withdrawal to the extent of the gain in the policy and may also be subject to a 10% penalty tax

A MEC is a heavily funded life insurance policy which is taxed as an annuity in certain situations. A MEC does not receive all of the tax preferences of life insurance.

As with whole life insurance, the cash value build up of a MEC is tax deferred and the death benefit is income tax free.

Should I purchase a life insurance policy which is a Modified Endowment Contract? That depends on the reasons you want to purchase the life insurance policy. If your primary concern is to protect your beneficiaries from your premature death, the MEC status will probably have little effect. The two major tax advantages remain in place. In addition, payments received under a payment plan will still be taxed on a pro rata basis. However, if you plan to take lifetime distributions (including loans) from the policy, a MEC may not be appropriate.

What constitutes a distribution for Modified Endowment Contract for tax purposes? Distributions that are taxable include: policy loans, premium loans (paid from the cash value), assignments as collateral for loans, annual dividends used to repay loans or loan interest, dividends received in cash, and partial and full surrenders of the policy for cash. Continue reading “The cash value will still grow tax deferred and your beneficiaries will still receive the death proceeds income tax free”

Progressive Finance Cash Loans provides you with multiple options to handle those unexpectedemergencies when you need it most

Progressive Finance Cash Loans provides you with multiple options to handle those unexpectedemergencies when you need it most

Having a great credit score is becoming extremely rare and we feel no one should have to be totally denied the ability to obtain Progressive Finance Loans when they have nowhere to turn .

Progressive Finance Cash Loans provides with manifold options to handle those unpredicted emergencies when one needs it the most. These considerations are also taken into account when making the determination to approve clients for loans. In short these are basically dedicated to assist the people to obtain finance when they need it.

There are selected lenders who are available and provide flexible financing solutions that provide the leverage one needs from personal loans

When the economy takes a down turn, lots of people often look for means to make ends meet at the end of each month which is sometimes possible and sometimes not. It comes at a higher value if compared to the common loan. Finance firms, in regular intervals make it certain that a range of people are generating these short term, greater curiosity loans which can be called by numerous names- immediate cash loans., cash advance loans and what not. Progressive Finance offers a major solution to the problems. The customer who’s seeking for a loan typically writes a post-dated confirmation for virtually any predetermined interval and thereby payday lender agrees to carry proof until the borrower’s following payday. Continue reading “Progressive Finance Cash Loans provides you with multiple options to handle those unexpectedemergencies when you need it most”