Strategic investments
The policy has to pass the 7-pay test, which limits the amount of premiums that can be paid into the policy in the first seven years without it becoming a MEC. If the policy becomes a MEC after the first seven years, it can still enjoy the tax benefits of IRS code 7702A.
By meeting this rule, a MEC can give you these tax benefits:
The growth of the cash value is tax-deferred, which means you don’t pay taxes until you take the money out or end the policy. The withdrawals and loans from the cash value are tax-free, up to the amount of premiums paid into the policy. Any excess amount is taxed as ordinary income and may be subject to a 10% penalty if taken before age 59 1/2. The death benefit is tax-free to the people who get it, no matter how big the policy or the cash value is. A MEC can help you increase your wealth creation and strategic investments, as it can give you:
A higher return potential than other types of investments, as the cash value can grow faster and higher with the performance of the investments or the policy dividends. A way to access your money when you need it, as the cash value can be withdrawn or borrowed from at any time, without any restrictions or penalties, as long as you follow the IRS code 7702A rules. A way to protect yourself from market risk, as the cash value and the death benefit are guaranteed by the insurance company, as long as the policy stays active and the premiums are paid. A way to protect yourself from living too long, as the cash value and the death benefit can give you income and protection for as long as you live, no matter how long you live. We can help you create a MEC that fits your needs, goals, and risk level. We can help you pick the type of policy, the amount of coverage, the premium payment plan, the investment options, and the withdrawal and loan strategies that work best for you. We can also help you check and change your policy over time, as your situation and goals may change. We can help you see how your policy is doing, update who gets the money when you die, and make any changes to your policy to make sure that it keeps meeting the IRS code 7702A rules and gives you the best tax benefits. If you want to know more about how we can help you boost your wealth creation and strategic investments with a MEC under IRS code 7702A, please contact us today for a free chat. We are happy to hear from you and help you reach your financial goals.