All the following statements concerning a level-premium whole life insurance policy that is a MEC are correct, EXCEPT: The policy is subject to LIFO tax treatment with respect to policy loans. A taxable loan from the policy will increase the policyowner's basis. During the first 7 years of the policy, the entire amount of a loan will be taxable. O A 10% penalty tax generally applies to a taxable loan if the policyowner is under age 5942