Liquid Modified Endowment Contract

[jasonten]

Is there such thing as a liquid MEC? and if so, what are the pros and cons?

 

[Newby]

That sounds redundant. If a MEC wasn't liquid, who would even care that the money is taxed as a MEC instead of life insurance. It's only taxed if you pull money out. And if you can pull money out...it's liquid.

Sounds like a new marketing spin.

 

[jasonten]

sorry, just heard about it from a famed wealth manager. sounded fishy to me too

 

[cowgoesMoO]

sorry, just heard about it from a famed wealth manager. sounded fishy to me too

so liquid means what to you? The client would get a debit card for their cash value account? or they could get most if not all of their money back sans surrender charges and possibly a 10% penalty and income tax if applicable.

you must be talking about SPL. And it can look attractive for the right situation. I just wrote a SPWL for a 69 year old. 75k pour in=111k face value; it started off with 68k in cash value after 5 years cash value was 75k, and increasing death benefit. This is a MEC and it's liquid enough.

 

[Tahoe Ray]

so liquid means what to you? The client would get a debit card for their cash value account? or they could get most if not all of their money back sans surrender charges and possibly a 10% penalty and income tax if applicable.

you must be talking about SPL. And it can look attractive for the right situation. I just wrote a SPWL for a 69 year old. 75k pour in=111k face value; it started off with 68k in cash value after 5 years cash value was 75k, and increasing death benefit. This is a MEC and it's liquid enough.

And there are several of those policies that through either design and/or ROP riders can be liquid (100% of premuims returned on surrender) from day 1.

 

[scagnt83]

You could do this strategy with Midland/NA using their ECV policy.

 

[ATM]

Is there such thing as a liquid MEC? and if so, what are the pros and cons?

Yes there is. I own one. 100% liquid from day one but a MEC. Tax deferred until and if I take anything out, tax free death benefit if I die and leave to my wife or kids.

Values have done very well over the past three years and has no downside risk plus I got about 3x the premium in death benefit protection at my age and rating.

See above post.

 

[Mehler91]

Equitrust's WealthMax Bonus product is one I have had success with.