67 / How is the guideline premium and cash value corridor test met?
To meet the guideline premium and cash corridor test, the contract must first meet certain guideline premium requirements and, second, the contract must fall within the cash value corridor.
For the contract to meet the guideline premium requirement, the sum of the premiums paid under the contract must not at any time exceed the greater of (1) the guideline single premium as of such time, or (2) the sum of the guideline level premiums to such date.1Premiums paid for purposes of this section means those paid under the contract less excludable amounts that are not received as an annuity under IRC Section 72(e) (e.g., dividends).2
The guideline single premium is the premium necessary to fund future benefits under the contract, determined at the time the contract is issued using the same factors as for the net single premium ( Q 66), except that the annual effective rate of interest is 6 percent instead of 4 percent.3