Question 9005 of 303 · California Life-Only Agent Exam
A modified endowment contract (MEC) results when
Exactly one answer is correct.
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Correct answer to question 9005
- C: a policy fails the seven-pay test
Explanation
MEC status causes loans and withdrawals to be taxed on a last in, first out basis, with a possible 10 percent penalty before age 59 and a half.
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