7702 plan

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
gabriel1970
Posts: 88
Joined: Sat Jan 04, 2014 5:13 pm
Location: Boston, MA

7702 plan

Post by gabriel1970 » Sun Oct 04, 2015 9:48 am

I have been approached by two separate Transamerica financial advisors for investing in 7702 plans. I have never heard about it, but of course am skeptical. I googled it and found this:

A 7702 is not a “retirement plan” as most people understand retirement plans. Rather, it’s another name for a life insurance policy, often variable universal life.

Would you please advise me if I am missing something good by staying away?

User avatar
grabiner
Advisory Board
Posts: 20973
Joined: Tue Feb 20, 2007 11:58 pm
Location: Columbia, MD

Re: 7702 plan

Post by grabiner » Sun Oct 04, 2015 2:41 pm

The fact that it is being called a "7702 plan" (after the relevant section of the tax code) rather than a "variable universal life plan" implies that the seller wants to hide what the plan actually is, presumably to sell it to people who don't need any variable universal life insurance. Therefore, even without any details, I wouldn't buy it, or anything else, from this advisor.
David Grabiner

dhodson
Posts: 4117
Joined: Mon May 24, 2010 3:03 pm

Re: 7702 plan

Post by dhodson » Sun Oct 04, 2015 3:45 pm

additionally one should realize that transamerica just recently increased insurance costs on their INFORCE polices above the typical increases that occur with just increasing age in a UL policy. Given that mortality isnt increasing, i find that "interesting" myself and it would worry me personally about buying a policy from them. Might want to google transamerica cost of insurance increases to read up on it.

User avatar
LadyGeek
Site Admin
Posts: 41556
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: 7702 plan

Post by LadyGeek » Sun Oct 04, 2015 3:50 pm

This thread is now in the Personal Finance (Not Investing) forum (insurance contract masked as a pension plan).

Please see this thread: Retirement Plan 702(j)

The wiki has some background info: 7702 private pension
To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

SGM
Posts: 2411
Joined: Wed Mar 23, 2011 4:46 am

Re: 7702 plan

Post by SGM » Thu Oct 12, 2017 11:35 am

I was disappointed to see that on Jonathan Clements website there is an advertisement for one of these plans. I like a lot of what
Clements has written, but this does not seem to be a product that he would endorse. Allowing such an advertisement on your website seems to imply that you approve of the product.

Post Reply