assignee receives any amount due to them before the beneficiary is paid. If there is more than one assignee, the assignees are paid based on date of the assignment, i.e., the earlier assignment date gets paid before the later assignment date. Types Single premium A Single Premium UL is paid for by a single, substantial, initial payment. Some policies contractually forbid any more than the one premium, and some policies are casually defined as single-premium for that reason. The policy remains in force so long as the COI charges have not depleted the account. These policies were very popular prior to 1988, as life insurance is generally a tax deferred plan, and so interest earned in the policy was not taxable as long as it remained in the policy. Further withdrawals from the policy were taken out principal first, rather than gain first and so tax free withdrawals of at least some portion of the value were an option. In 1988 changes were made in the tax code, and single premium policies purchased after were "modified endowment contract" (MEC) and subject to less advantageous tax treatment. Policies purchased before the change in code are not subject to the new tax law unless they have a "material change" in the policy (usually this is a change in death benefit or risk). It is important to note that a MEC is determined by total premiums paid in a 7-year period, and not by single payment. The IRS defines the method of testing whether a life insurance policy is a MEC. At any point in the life of a policy, a premium or a material change to the policy could cause it to lose its tax advantage and become a MEC. In a MEC, premiums and accumulation are taxed like an annuity on withdrawing. The accumulations grow tax deferred and still transfer tax free to the beneficiary under Internal Revenue Service Code 101a under certain circumstances. Fixed premium Fixed Premium UL is paid for by periodic premium payments associated with a no lapse guarantee in the policy. Sometimes the guarantees are part of the base policy and sometimes the guarantee is an additional rider to the policy. Generally these payments are for a shorter time than the policy is in force. For example, payments may be made for 10 years, with the intention that thereafter the policy is paid-up. But it can also