William Byrnes' Tax, Wealth, and Risk Intelligence

William Byrnes (Texas A&M) tax & compliance articles

Teaching an old dog a new trick: the modified endowment contract (MEC) and the modern portfolio

Posted by William Byrnes on June 6, 2014

The MEC 

A MEC is essentially a type of cash value life insurance policy that is subject to less favorable tax rules because it has been funded with premiums during the first seven years of the policy’s existence that exceed certain maximum amounts (depending on the policy’s benefit level and cost).  Despite this, the MEC’s worth today can remain substantial.

In some cases, dismissing the MEC too quickly can cause your clients to miss out on a valuable product.  For clients with sufficient means, the opportunity to rapidly fund a life insurance contract so as to become subject to the rules governing MECs may actually provide a powerful strategy in the well-rounded planner’s arsenal.

read this analysis in the article “The MEC and the Modern Portfolio


If you are interested in discussing the Master or Doctoral degree in the areas of financial planning, please contact me: profbyrnes@gmail.com to Google Hangout or Skype that I may take you on an “online tour” 

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