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Modified endowment contract defined

26 U.S.C. § 7702A

Publisher: U.S. Government Publishing Office / Office of the Law Revision Counsel
Edition: US Code
Last checked: 2026-09-01
Status: US Code, public domain

Edition and licensing notes

Edition. US Code (via govinfo.gov official link resolver), retrieved 2026-08-22

Status. US Code, public domain (US government work).

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26 U.S.C. § 7702A - Modified endowment contract defined is a federal tax code published by U.S. Government Publishing Office / Office of the Law Revision Counsel. It is one of the documents that insurance license exam questions are written from, including life & health practice questions. This page summarizes it and points to the official version, which is the text to rely on.

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26 U.S.C. § 7702A(d) (Distributions Affected)
“If a contract fails to meet the 7-pay test of subsection (b), such contract shall be treated as failing to meet such requirements only in the case of - (1) distributions during the contract year in which the failure takes effect and during any subsequent contract year, and (2) under regulations...”
26 U.S.C. § 7702A(b) (7-Pay Test)
“For purposes of subsection (a), a contract fails to meet the 7-pay test of this subsection if the accumulated amount paid under the contract at any time during the 1st 7 contract years exceeds the sum of the net level premiums which would have been paid on or before such time if the contract...”
26 U.S.C. § 7702A(c)(3)(A) (Treatment of Material Changes)
“(3) Treatment of material changes (A) In general If there is a material change in the benefits under (or in other terms of) the contract which was not reflected in any previous determination under this section, for purposes of this section - (i) such contract shall be treated as a new contract...”
26 U.S.C. § 7702A(c)(3)(B) (Treatment of Certain Benefit Increases)
“(B) Treatment of certain benefit increases For purposes of subparagraph (A), the term "material change" includes any increase in the death benefit under the contract or any increase in, or addition of, a qualified additional benefit under the contract. Such term shall not include - (i) any increase...”

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26 U.S.C. § 7702A - Modified endowment contract defined is a federal tax code published by U.S. Government Publishing Office / Office of the Law Revision Counsel. Edition: US Code (via govinfo.gov official link resolver), retrieved 2026-08-22.

No. This page summarizes the document and links to the official version. Always rely on the text published by U.S. Government Publishing Office / Office of the Law Revision Counsel for the current law.

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