Definition

Non-MEC Design

A PPLI policy funded within the §7702A seven-pay limits so lifetime loans and withdrawals stay tax-favored.

Full definition

A non-MEC PPLI policy is funded over at least the §7702A seven-pay period so that lifetime loans and withdrawals receive favorable tax treatment (basis-first withdrawals, tax-free loans). Non-MEC design suits owners who expect to draw living benefits from the policy.

Related terms

Modified Endowment Contract (MEC)

A life insurance contract that fails the §7702A seven-pay test, losing tax-free access to cash value during life.

IRC §7702A

The Modified Endowment Contract rules — the seven-pay test that governs whether a policy is a MEC.

Availability, tax treatment, and policy design depend on jurisdiction, carrier, investor qualification, and applicable law. simpleppli.com provides general educational information only — not tax, legal, insurance, or investment advice. Consult qualified tax counsel, insurance counsel, and licensed insurance professionals before implementing any PPLI structure.