98 STAT. 770
PUBLIC LAW 98-369—JULY 18, 1984 "(ii) accidental death or disability benefit, "(iii) family term coverage, "(iv) disability waiver benefit, or "(v) other benefit prescribed under regulations. "(B) TREATMENT OF QUALIFIED ADDITIONAL BENEFITS,—For
purposes of this section, qualified additional benefits shall not be treated as future benefits under the contract, but the charges for such benefits shall be treated as future benefits. "(C) TREATMENT OP OTHER ADDITIONAL BENEFITS.—In the
case of any additional benefit which is not a qualified additional benefit— "(i) such benefit shall not be treated as a future benefit, and "(ii) any charge for such benefit which is not prefunded shall not be treated as a premium. "(6) PREMIUM PAYMENTS NOT DISQUAUFYING CONTRACT.—The
payment of a premium which would result in the sum of the premiums paid exceeding the guideline premium limitation shall be disregarded for purposes of subsection (a)(2) if the amount of such premium does not exceed the amount necessary to prevent the termination of the contract on or before the end of the contract year (but only if the contract will have no cash surrender value at the end of such extension period). "(7) ADJUSTMENTS.—
"(A) IN GENERAL.—In the event of a change in the future benefits or any qualified additional benefit (or in any other terms) under the contract which was not reflected in any previous determination made under this section, under regulations prescribed by the Secretary, there shall be proper adjustments in future determinations made under this section. "(B) CERTAIN CHANGES TREATED AS EXCHANGE.—In
the
case of any change which reduces the future benefits under the contract, such change shall be treated as an exchange of the contract for another contract. "(8) CORRECTION OF ERRORS.—If the tgixpayer establishes to the
satisfaction of the Secretary that— "(A) the requirements described in subsection (a) for any contract year were not satisfied due to reasonable error, and "(B) reasonable steps are being taken to remedy the error, the Secretary may waive the failure to satisfy such requirements. "(9) SPECIAL RULE FOR VARIABLE LIFE INSURANCE CONTRACTS.—
Ante, p. 750.
In the case of any contract which is a variable contract (as defined in section 817), the determination of whether such contract meets the requirements of subsection (a) shall be made whenever the death benefits under such contract change but not less frequently than once during each 12-month period. "(g) TREATMENT OF CONTRACTS WHICH DO NOT MEET SUBSECTION (a) TEST.— "(1) INCOME INCLUSION.—
"(A) IN GENERAL.—If at any time any contract which is a life insurance contract under the applicable law does not meet the definition of life insurance contract under subsection (a), the income on the contract for any taxable year of
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