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In this video tutorial, Dr. Tom McPhee discusses modified endowment contracts (MECs) with his son. A MEC is essentially a life insurance policy that has been overfunded, meaning more money is paid into it within the first seven years than necessary to cover the policy's obligations. This overfunding can lead to the policy being treated as a taxable event, similar to distributions from a 401(k) or an IRA. To avoid triggering MEC status, it is crucial to ensure that the policy's initial design does not allow for excess premiums during the first seven years. Viewers are advised to carefully consider these guidelines when evaluating or managing their policies.