What is an MEC?
MEC stands for Modified Endowment Contract. An MEC is a life insurance policy with premium payments exceeding federal tax limitations in the ﬁrst seven years after issue or a change in beneﬁts. The cash value of an MEC will accumulate income tax free. In addition, death beneﬁts will still be income tax free to the beneﬁciary. Any pre-death distributions, such as full or partial surrenders, policy loans, and policy assignments, are taxable to the extent there is a gain in the policy. In addition to regular income tax, a 10% federal tax penalty is imposed on the taxable portion of the distribution. The penalty tax is waived only if the taxpayer is over 59½ or disabled, or if the distribution is paid out as a life annuity.1
1Catholic Order of Foresters nor its agents offer tax advice; consult a tax professional regarding your specific situation.
What is a universal life policy and how does it work?
A Universal Life policy is a type of permanent life insurance with the benefit of a flexible premium and possible cash value. When premium is paid, a portion of it pays for the cost of insurance. The remainder of the premium is added to the cash value and may earn current interest.
Flexibility: you decide the amount of premium payments, subject to the minimum required premium to cover monthly cost of insurance.
Premium: after cost of insurance, and expenses are deducted, the balance will be added to your account value and will be credited current interest rates (but not less than guaranteed rates).
Death Benefit: this will be paid to your beneficiaries, generally income tax-free.
- Option A – Level death benefit (amount of life insurance)
- Option B – Death benefit plus your policy account value
Can the death benefit of my policy be advanced if I am diagnosed as terminally ill?
If you are diagnosed with a terminal illness, you can access up to 50% of the death benefit amount in advance. Subject to terms and conditions.
What is the Fraternal Legacy Rider?
The Fraternal Legacy Rider (FLR) is a rider that can be added to certain life insurance policies. When you purchase a COF life insurance policy with a death benefit of $50,000 or more, you can add the FLR to your policy. It provides an additional five percent death benefit to a Catholic organization of your choice at no additional cost to you. The rider's flexibility allows you to name multiple charitable beneficiaries. For more information, visit this page!
How do I make a death claim?
Call the Home Office at 800-552-0145 and ask for the Claims Department.
Please have the following information available when you call:
- Insured's name and date of death
- Certificate or policy number
- Contact person's information, including phone number and address
Once you provide this information, we will mail the claimant forms to the policy's beneficiary(ies) that we have on file.
The information the beneficiary returns to the Home Office must include:
- Completed claimant forms (completed by each beneficiary)
- Certified copy of the Insured's death certificate
- Original policy or contract, if available