Modified Endowment Contracts (MEC)

When you think about Annuities, what is your first thought? Low returns? High Fees? Boring?

As you are reading everything on this site and gaining an understanding of how life insurance companies are able to offer such high interest-crediting strategies on insurance products like Indexed Universal Life (IUL), maybe you are wondering if they do the same thing on their Annuity products.

Well, while many companies do offer Fixed Indexed Annuities that function similarly to what we’ve described here, these products still do not offer interest crediting that is anywhere near that of an IUL.

If you want the high interest-crediting or dividend potential of an IUL or Whole Life policy in an Annuity, then a Modified Endowment Contract is the solution. A Modified Endowment Contract  is very similar to a traditional annuity. A Modified Endowment Contract  grows tax-deferred like an annuity, but unlike annuities, they have a tax free death benefit. Think of it as a “hybrid”.

Our “Estate Booster” strategy is based on the use of a Modified Endowment Contract. A Modified Endowment Contract a great financial tool for wealth transfer between generations.

Click here to view “Estate Booster” page.

A few companies have introduced specialized versions of Modified Endowment Contracts that also pay Long Term Care benefits. Why would you want to use a Modified Endowment Contract to supplement your Long Term Care? There are a couple of great reasons:

  • First, it’s not a “use it or lose it” proposition. If you do not use the Long Term Care benefit of a Modified Endowment Contract, the benefit is still included in the Death Benefit and is passed on to your beneficiary.
  • Second, the benefit is not a “Reimbursement” like many Long Term Care plans. That means you can use the benefit proceeds however you want.

A Modified Endowment Contract is the perfect financial vehicle for all of the “What-ifs?” that weigh on your mind.

  • How do I earn a good return yet protect the principal?
  • How do I earn a good return while maintaining liquidity?
  • How do I maximize the benefit for the next generation while maintaining an emergency fund for my own needs?
  • How do I protect my wealth in case I become chronically ill?

As featured on

Questions? Click the button to schedule a time for us to call you.

No Rendering of Advice: The financial content in this document is provided for your personal education. It is not intended for trading purposes, and cannot substitute for professional financial advice. Always seek the advice of a competent financial advisor with any questions you may have regarding a financial matter. Information in this document is not appropriate for the purposes of making a decision to carry out a transaction or trade nor does it provide any form of advice (investment, tax, or legal) amounting to investment advice, or make any recommendations regarding particular financial instruments, investments, or products.

The sole purpose of life insurance is for the death benefit protection. Any other benefit is ancillary.