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Modified Endowment Contract (MEC)

🕊️ Life

A life policy funded so fast it loses some tax perks and gets taxed more like an investment. Usually something to avoid.

🎓 Agent note Overfunding past the 7-pay limit triggers MEC status — withdrawals become LIFO-taxed with possible penalties. Watch the funding on cash-value sales.

This is a friendly general explanation, not legal or policy language. Exact coverage depends on your policy, carrier, and state. 🤝

Written and reviewed by the We Insure Things team — licensed independent insurance agents. Last reviewed July 23, 2026. Questions? Ask a licensed agent.

Term Life Whole Life Universal Life (UL) Indexed Universal Life (IUL) Beneficiary Death Benefit Cash Value Face Amount

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