Your savings can be taxed if you set your life insurance up incorrectly. Simply put, when you deposit "too much" into a life insurance policy, you create a "Modified Endowment Contract" (MEC.) So, what are the disadvantages of a MEC? Any gains you make in your policy will be taxed at your individual tax rate upon withdrawal There's a 10% early withdrawal penalty if you try to take out before 59.5 Because of the 10% penalty, your money is less accessible Worst part? Once your policy has been established as a MEC, it's impossible to overturn. So, how do we avoid converting our policy into a MEC? In today's episode, you'll discover how to make sure your policy remains tax free forever. Listen now! Show Highlights Include: How converting your policy into a "MEC" forces you to pay income tax on the growth of your savings (1:03) How the same death benefit can cost you either $50 a month or $200 a month and what the difference is (4:59) How to avoid paying any agents or brokers fees when investing in a whole life insurance policy with "paid up additions" (6:06) Why shrinking your policy's death benefit legally allows you to receive a higher payout when you retire (11:15) Reach out to me: [email protected] https://www.linkedin.com/in/valerie-laroque-lacp-b569509Infinite Banking Mastery (infinitebankingnorthwest.com)

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