Modified Endowment Contract - An Overview
A modified endowment contract (also called an MEO) is a type of life insurance contract that differs from most ordinary life insurance contracts. Most commonly, these are obtainable only for spouses and the children of the policyholder. But, nowadays, people can also use them for anyone including non-dominant parties. This can be done by simply making necessary adjustments to the plan itself.
In a nutshell, a modified endowment contract essentially allows the beneficiaries of the contract to convert their contracts into a permanent or lifelong income plan. Such income plans can be in the form of stocks, dividends, cash, bank loans, or even government pension plans. With this, the beneficiaries of the contract can enjoy financial independence as they can now take advantage of the higher incomes even if they cannot contribute as much money as the original contract provided. If you are a person who wants to make such an income plan for your future, it is highly recommended to talk to a qualified financial advisor so that you can understand how the system works. You can also seek the advice of your attorney, if you have one so that you can fully understand what should happen to your assets once you sign the contract. Learn more about insurance at https://en.wikipedia.org/wiki/Insurance.
The concept behind endowments and modified endowment contract is relatively simple. Basically, the contract states that the policyholder will be given an amount upon death or a set amount based on a percentage of the insured party's annual salary. However, there are still some details that need to be looked into before finalizing the deal. First off, the person who signs the contract should agree to the contract and also should understand what should be included in it. Also, there should be a document explaining the modifications that can be made to the plan and also a timetable for them.
Paradigm Life modified endowment contract should not be used to replace the original retirement plan. Instead, it should be used to supplement the original plan in case of the death of the principal. Once that happens, the person who receives the money from the original plan has the authority to use the money in several ways provided that it conforms to the terms of the modified endowment contract.
Basically, there are two types of endowment contracts that can be used as supplements to retirement plans. One of these is the simplified endowment contract. This is a fairly normal contract that contains few stipulations. The other is the more complex and lengthy version of the contract. This contains detailed provisions for investments, asset protection and also for tax implications.
It is also possible to get hold of an endowment contract online at Paradigm Life. There are websites that allow you to easily and conveniently obtain one from the privacy of your home. Just make sure that the website you choose is a reliable one. It is also advisable to use a company that specializes in endowments as they will have better knowledge about various modified endowment contracts and will also be in a position to offer you the best possible deal.