However, in addition to the guideline premium test (GPT) or cash value accumulation test (CVAT), which qualifies a policy as life insurance under the Internal Revenue Code, a cash value life insurance policy is also subject to the 7-pay test. This test determines the amount of premiums that can be paid into a policy and still receive favorable tax treatment of cash withdrawals and loans. Life insurance policies that fail the 7-pay test are called modified endowment contracts (MECs).