29 May 2014 0 Comments

Is a MEC bad? Can it be avoided?

The term “MEC” is an acronym for Modified Endowment Contract.  A MEC is created when the premiums paid in the first 7 years of a life insurance policy exceed certain limits.  Unless you’re an actuary there is no need to know the formulae that defines those limits.  If you are contemplating the purchase of a [...]

16 May 2014 0 Comments

What do you do with the cash?

In my last entry I discussed steps to take when replacing one life insurance policy with another.  Now I’ll cover what considerations there are when a life insurance policy that has cash value is either being replaced or discontinued. Options available to use the cash to continue insurance with the same policy were covered two [...]

14 May 2014 0 Comments

Help! My Life Insurance Premiums are too High!

If premiums for your car insurance are too high, you simply shop the market and if another insurance company beats what you’re paying, you switch.  It’s a pretty easy decision to make.  But, the Life Insurance switch is not so easy.  Aside from the fact that life insurance policies tend to be more complex, it’s [...]

8 May 2014 0 Comments

The Case of the Unecessary ILIT

A few years ago you may have established an Irrevocable Life Insurance Trust (ILIT) in order to provide liquidity for estate taxes.  At the time, the per-person exemption was only $1,000,000 but now the exemption is north of $5,000,000 and due to rise with the CPI.  The life insurance in that ILIT is no longer [...]

25 April 2014 0 Comments

The Truth About Annuities

The mere mention of annuities among investment advisors can conjure up a myriad of opinions from: they’re a lousy investment—to—what a great tax advantage.  Interestingly, both of these statements might be true.  Of late, the debate has grown louder due to a plethora of Indexed Annuities that seem to promise the best of both worlds—growth [...]