Talk:7702 private pension

On an administrative note, was the intention of the website links to be citations (footnote references) to any of the text? If so, point them out and I'll help with the formatting.

Can you cite a forum thread which shows the "Boglehead's view of a 7702"?

Here's the direct link to 26 U.S.C. 7701 - Definitions


 * §7702. Life insurance contract defined
 * §7702A. Modified endowment contract defined

Note that the definitions are different than the IRS regulations which appear here: eCFR — Code of Federal Regulations

--LadyGeek 20:27, 25 June 2014 (CDT)

1) There was no intent to assign specific citations, the information so far is too general.

2) For background: Section 7702 was added to the code to curb prior abuses of life insurance for tax sheltering. The current 7702 plans skirt the edges of these regulations, lest the plans be redefined as MEC's under 7702A, loosing tax benefits.  The general goal seems to be for the insured to borrow money out of the cash value late in life, then die with the loan unpaid.

3) Given the insanely high fees of a 7702, it seems counter to every thread of a Bogglehead's being. A search in the forums shows little love for 7702's.

--Bnes 00:13, 26 June 2014 (CDT)

Reader feedback: 7702 is in the IRS Code that...
98.201.213.46 posted this comment on 9 February 2015 (view all feedback).

"7702 is in the IRS Code that allows loans from life insurance to be tax-free if the policy is properly funded, there are guidelines to how much you can put into a life insurance policy. With Index Universal Life you have the greatest potential for making money on a Tax-Favored Basis, the policies are so powerful there are many banks who will lend millions to high net worth individuals to put inside a properly funded life policy and the policy many times is the only collateral needed. Most corporations by this type of insurance on as many employees as they can and it is called COLI (Corporate Owned Life Insurance) and most Banks invest their Tier One assets into it and its called BOLI (Bank Owned Life Insurance). The banks and corporations get their insurance without high surrender charges and all the money they put in are readily available and they don't buy it from your local insurance agent. There are many uses for life insurance and Index Life works best as an investment."

Any thoughts?Blbarnitz 02:24, 16 February 2015 (CST)


 * These statements should be examined by insurance professionals.--Blbarnitz 02:24, 16 February 2015 (CST)
 * I have PM'd the primary page author for an opinion. --LadyGeek 18:48, 16 February 2015 (CST)
 * The primary author has replied. The above comments appear to be written by an insurance professional and are promotional; the page will not be updated. --LadyGeek 20:16, 16 February 2015 (CST)
 * I feel the COLI and BOLI links below go beyond the scope of this page, and really don't belong. The 7702 page is meant to inform an individual about a product they may be sold ("7702 private pension"), and really does not get into the issues of corporate owned policies.  I prefer if those links (and even the comment) be removed. Bnes 21:25, 16 February 2015 (CST)

COLI

 * Everything You Should Know About Corporate-Owned Life Insurance, investopedia
 * A Layman’s Guide to Corporate-Owned Life Insurance, ASA Rick Schnurr - ‎2008
 * Guidelines on Corporate Owned Life Insurance, National Association of Insurance Commissioners

BOLI

 * Bank-Owned Life Insurance: A Primer for Community Banks, Federal Reserve
 * Interagency Statement on the Purchase and Risk Management of Life Insurance, COC Bank Owned Life Insurance (BOLI) --Blbarnitz 03:08, 16 February 2015 (CST)

Index universal life insurance

 * Google search--Blbarnitz 03:22, 16 February 2015 (CST)