Life · Chapter 4 · Special Products
Seven-Pay Test / TAMRA
Definition
From TAMRA (1988), codified at 26 U.S.C. §7702A: for a contract entered into on or after June 21, 1988, if premiums paid in the first 7 contract years exceed the sum of the net level premiums that would have paid the policy up in 7 years, it's a MEC. Purpose: stop using life insurance as a tax shelter.
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
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