UL Policy in violation of the Guideline Premium Test

I’m working with a Universal Life policy which is in imminent danger of violating the Guideline Premium Test (GPT) while at the same time not maintaining a cash value. As a result, premiums can’t be paid into the policy without exceeding the GPT limit, but if premiums are not paid in the policy would go into grace. I understand that there is a provision in IRS section 7702 that provides for policies in this situation to remain inforce as long as the COI charge is paid annually. My question is, as we are forecasting premiums going forward and so are simply estimating the COI charges, we could potentially go slightly over the required payments. Does anyone know what would happen should we remit a premium that is, say $100 over the COI? I would hate for the policy to lapse should we be $1 short, or violate the GPT if it $1 over the limit. Thanks in advance for any suggestions!

You would typically refund any excess at the end of the year such that the CV at the end of the policy year is $0. I have seen some companies set that amount to $1 to avoid the system starting lapse processing. Some companies have a refund put into a suspense account and then removed from suspense when the next premium is paid and treated as new premium, but that can also get messy. Some companies feel that a few dollars above 0 is in good faith and don’t worry about it, but that is not the letter of the law.

Thanks so much, I really appreciate the info!