What Is an IRC 7702 Plan?

Many insurance agents sell a "7702 plan" or "7702j retirement plan" as a retirement savings option. Often these plans are very similar to workplace retirement plans such as 401ks or traditional IRAs. However, 7702 plans are quite different.

A 7702 Plan Is Not a Retirement Plan

When many people hear the term "7702 plan," they immediately think of a retirement plan like a 401k or IRA. These retirement plans are designed to help people save for their future by allowing them to make tax-deductible contributions to an account.

There are some good things about a 7702 plan but also a few bad points. For one, 7702 plans are more expensive than other life insurance policies. They also often come with high fees and commissions.

Another major drawback of a 7702 plan is that they need to be tax-deferred. Unfortunately, unlike 401ks or IRAs, you can't defer taxes on the cash value of your 7702 plan until you withdraw it for purposes other than a tax-free death benefit payout to your beneficiaries.

What Is an IRC 7702 Tax-Advantaged Plan?

The IRC 7702 tax-advantaged plan is a type of permanent life insurance. These life insurance policies have a lot of benefits that are important to people who want to invest their money for the long term. In addition to the life insurance benefits, these policies can be an excellent way to grow wealth.

These policies can be a great way to save for your retirement while also helping you protect the people you love. In addition, many experts believe that life insurance is one of the best ways to protect your wealth for future generations.

What Is an IRC 7700 Life Insurance Policy?

While there are a few different life insurance policies, section 7702 of the Internal Revenue Code (IRC) covers all life insurance policies. Therefore, any life insurance policy could be called an IRC 7702 plan.

Knowing what an IRC 7702 plan is essential to make informed decisions about your finances and the best way to invest your money. Regardless of the type of plan you choose, always consult an experienced financial professional to ensure you're getting the most out of your investment.