Sentences with phrase «exceeding mec»

Cash value accumulation in a whole life policy can also be enhanced through what is called life insurance policy paid up additions up to certain maximums that are close to, but not exceeding MEC life insurance policy limits.

Cash value accumulation in a whole life policy can also be enhanced through what is called life insurance policy paid up additions up to certain maximums that are close to, but not exceeding MEC life insurance policy limits.

Because having the policy classified as a MEC would have adverse tax consequences, policyowners and their advisers should take some care when this dividend option is selected to assure that premiums do not exceed the MEC levels.

Not exact matches

Generally speaking, loans and partial surrenders from MECs result in immediate taxation to the extent that the cash value of the contract exceeds the premiums paid.

If certain limits are exceeded, a MEC results and MEC policyholders may be subject to taxes on distributions on an income - first basis, that is, to the extent there is gain in the policy and penalties on any taxable amount if they are not 59 1/2 or older.

If a VUL policy is a modified endowment contract (MEC), then a partial withdrawal from the policy is taxable only to the extent that it exceeds the total investment in the policy.

There may be adverse tax implications for policies classified as a modified endowment contract (MEC) or if the amount of your loans exceeds the cost basis of the policy.

However, if the funding of the certificate exceeds certain limits, it will become a «modified endowment contract» (MEC) and become subject to «earnings first» taxation on withdrawals and loans.

Modified Endowment Contract If the amount of money you pay into your policy exceeds certain thresholds determined by the Internal Revenue Service, your policy will be considered a Modified Endowment Contract (MEC) for tax purposes.

There may be adverse tax implications for policies classified as a modified endowment contract (MEC) or if the amount of your loans exceeds the cost basis of the policy.

However, if the funding of the certificate exceeds certain limits, it will become a «modified endowment contract» (MEC) and become subject to «earnings first» taxation on withdrawals and loans.

If the maximum amount of the premium is exceeded, the policy turns into a modified endowment contract (MEC) which ensures the death benefit with investment returns but withdrawals of the cash value are subject to taxes as ordinary income.

In general, if the funding of a certificate exceeds certain limits, it will become a «modified endowment contract» (MEC) and become subject to «earnings first» taxation on withdrawals and loans.

If the 7 year level guideline premium is exceeded, then the policy becomes a MEC.

A policy can become a MEC when the combined premiums paid during the first 7 years that the policy is in force exceeds the 7 pay test premium.

A modified endowment contract (MEC) is a tax qualification of a life insurance policy whose cumulative premiums exceed federal tax law limits.

If certain limits are exceeded, an MEC results.

Payments can not exceed TAMRA 7 pay MEC limits or guideline premium limits however, limits the government places on all insurance contracts regarding total contributions to the policy.

If certain limits are exceeded, a MEC results and MEC policyholders may be subject to taxes on distributions on an income - first basis, that is, to the extent there is gain in the policy and penalties on any taxable amount if they are not 59 1/2 or older.

If certain limits are exceeded, a MEC results.

The policy can be designed for early high cash value growth, designed to provide maximum funding up to, but not exceeding, the MEC limits.

If the annual MEC limit is $ 5,000, then the policy owner will exceed the $ 24,000 limit in the fifth year of the policy.

If the amount deposited exceeds the policy limit than the policy becomes a MEC (modified endowment contract).