Most investors have never heard of a "7702 account." This makes sense, given that Wall Street doesn't make money managing these accounts.
But a 7702 account is no gimmick. It’s part of the U.S. tax code, and when structured correctly, it can provide tax-free growth, reliable income, and long-term protection for your wealth.
Download our 7702 Financial Control Blueprint and discover how high-income professionals use this structure to reduce taxes, build wealth, and gain true financial control.
Section 7702 of the Internal Revenue Code governs how life insurance contracts are taxed.
A “7702 account” is simply a properly structured cash value life insurance policy, designed not just for death protection but for living benefits.
Think of a 7702 account like a Roth IRA. However, it has fewer restrictions, more flexibility, and the added benefit of protecting your money from market losses.
You fund your 7702 account with after-tax dollars, it grows tax-advantaged, and you can access that growth tax-free.
Unlike a Roth, though, you aren’t limited by contribution caps, age restrictions, or government rules on when you can access your money.
When designed properly, a 7702 account offers a unique blend of safety, growth, and flexibility that traditional accounts simply can’t match.
Tax-free growth and tax-free withdrawals.
Protection against market losses with a contractual 0% floor.
Annual gains locked in so your money compounds steadily.
Flexible access to funds at any age without penalties.
Potentially higher retirement income distributions than traditional plans.
A 7702 account passes to heirs income-tax free.
Here’s how a 7702 account works in practice:
You contribute with after-tax dollars, similar to how you fund a Roth.
Your money grows tax-advantaged, with no risk of market loss thanks to a guaranteed 0% floor.
Growth in your 7702 account is linked to a market index, but you’re never directly invested in the market.
In retirement, you can withdraw your contributions and then access additional income through policy loans, keeping the withdrawals tax-free.
Even when you borrow from your 7702 account, your account continues to grow, creating uninterrupted compounding.
During market downturns, the 7702 account serves as a “buffer asset.” It lets you avoid selling from volatile investments and protects your overall retirement income.
A 7702 account can be a good fit for:
Pre-retirees and retirees who want more tax-free income.
High W-2 earners frustrated with their annual tax bill.
Families with most of their wealth in tax-deferred accounts like 401(k)s and IRAs.
Anyone who wants safety, flexibility, and legacy protection.
A 7702 account may not be the right fit if you want maximum market upside, if you aren’t able to fund consistently, or if you’re looking for a short-term play rather than a long-term strategy.
Like any financial strategy, 7702 accounts have tradeoffs, and it’s important to understand them.
Costs are concentrated in the early years; design and funding discipline matter.
Loans taken against the account carry interest and require management.
Overfunding can trigger MEC (Modified Endowment Contract) status, which changes tax treatment.
Health underwriting applies, which means the earlier you start, the easier and more cost-effective it may be.
They must be customized. No two accounts should be designed exactly the same.
Handled properly, these tradeoffs in a 7702 account are what make the strategy effective. You get a balance of protection, growth, and flexibility.
There are a few reasons most people don’t know about 7702 accounts:
Wall Street firms make their money managing investments, not promoting insurance-based strategies.
Banks and institutions quietly use similar structures themselves, but they don’t advertise 7702 accounts to the general public.
Much of the information online is biased or misleading, often published by those who profit when you stick with traditional accounts.
That’s why you may not have come across a 7702 account until now. It’s important to get the facts from someone who has used these strategies personally and guided families through them for decades.
At Eastman Wealth Strategies, we’ve been guiding families through every market cycle for nearly 50 years.
Unlike advisors who only push investments or only sell insurance, we have built a contrarian approach rooted in stewardship, clarity, and results.
We not only design 7702 account strategies for clients—we use them personally.
We also coordinate directly with your CPA and attorney to ensure your tax, retirement, and estate strategies are aligned. That way, your plan isn’t just technically sound. It’s cohesive, clear, and built to last.
Want to see if a 7702 account could fit into your retirement or tax strategy? Start with our Financial Control & Tax Efficiency Scorecard. It takes less than five minutes and gives you instant clarity.
If you’d rather skip the quiz and talk it through directly, schedule a relaxed, 20-minute Discovery Call. Together we’ll explore whether this strategy is right for you.
*Disclaimer: Financial Advisors do not provide specific tax/legal advice and this information should not be considered as such. You should always consult your tax/legal advisor regarding your own specific tax/legal situation. Separate from the financial plan and our role as a financial planner, we may recommend the purchase of specific investment or insurance products or account. These product recommendations are not part of the financial plan and you are under no obligation to follow them. Life insurance products contain fees, such as mortality and expense charges (which may increase over time), and may contain restrictions, such as surrender periods.