Modified Endowment Contract Series: Does an MEC Make Sense for You?

Modified Endowment Contracts: Chapter 5 of 5

Simply put, investing in a Modified Endowment Contract (MEC) would make sense if you’ve maximized your other investments and are looking for more creative ways of growing your money.

Expert Recommendations for MECs

For the average investor, following the advice of theMoney magazine’s “Mole” is probably a wiser strategy. The Mole states, “If you are a disciplined saver, I strongly recommend buying term and investing the rest. If you need a forced savings vehicle and you can’t find that vehicle elsewhere, then you may want to consider a permanent policy. But either way, make sure you understand what it is you’re buying and how much it’s costing you.”

MEC Complexity

Because someone considering an MEC would have to be well-versed in life insurance and taxes, it is not recommended for average investors or those without significant financial knowledge. You can also seek the help of a qualified expert and let them handle the complexities of a modified endowment contract on their own.

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