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A 7702 plan refers to a specific section of the U.S. tax code (IRC Section 7702) that deals with life insurance policies. It sets certain tax guidelines for life insurance policies to qualify as tax-advantaged investments. The section was established as part of the Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982. Essentially, a 7702 plan outlines rules for insurance policies that provide tax benefits, such as tax-deferred growth and tax-free withdrawals under specific conditions, making them attractive for some individuals as a financial planning tool, particularly for estate and retirement planning.Â
A 7702 plan refers to a specific section of the U.S. tax code (IRC Section 7702) that deals with life insurance policies. It sets certain tax guidelines for life insurance policies to qualify as tax-advantaged investments. The section was established as part of the Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982. Essentially, a 7702 plan outlines rules for insurance policies that provide tax benefits, such as tax-deferred growth and tax-free withdrawals under specific conditions, making them attractive for some individuals as a financial planning tool, particularly for estate and retirement planning.Â
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