Type ‘770 Account’ into Google and you will immediately be confronted by a range of articles on whether it’s even real. Many people still don’t believe the 770 Account even exists.
In this article, we are going to go through some of the facts you need to know about the 770 Account.
A Life Insurance Policy
The 770 Account isn’t some sort of secret IRS perk for people that it happens to get along with. It’s actually a type of life insurance policy you can buy from practically any mutual life insurance company. It’s a life insurance policy that, when structured in the right way, minimizes any death benefits paid while also boosting the cash value to its greatest possible heights.
The Tax-Free Argument
The reason why many people don’t believe the 770 Account actually exists is because you can withdraw the cash value any time you like . . . tax-free. This is exceptional among life insurance policies. Most of the time you’re taxed heavily when you withdraw, and that doesn’t even take into account the penalty fees you face for early withdraw.
With the 770 Account, this isn’t the case. You pay nothing.
Are they Legal?
The simple principles of these accounts say that something must be wrong and you are going to be doing something illegal. Since practically all licensed insurance agents can sell them, this should prove that they are perfectly valid. They are a fantastic fit for certain people and are completely legitimate. Yes, it’s a form of tax avoidance, but remember that tax avoidance is still playing within the rules set by the IRS.
The Main Benefits of this Permanent Life Insurance Policy
Assuming your permanent life insurance policy is structured in the right way, it can bring many benefits. Take note that I frequently bring up this term ‘when structured in the right way’. It requires a touch of a professional to gain the most from a policy like this.
The main benefits are:
- Tax-deferred growth.
- Annual dividends.
- The ability to withdraw the cash value whenever you like tax-free.
- Protection from creditors.
These policies offer a spectacular rate of return, compared to other life insurance policies. In fact, they can even serve as collateral.
As an add-on, you can take advantage of disability benefits. These will keep the policy valid until you are 65, or you are too disabled for it to continue. What we love about the 770 Account is that it transfers to your heirs 100% tax-free. You won’t find a better deal anywhere in town.
A Simple Conclusion
There’s a reason why the rich tend to use this account more than anyone else. You don’t get much of a return unless you’re borrowing the money from the policy. The principle is that the interest paid is paid to yourself not the bank. That’s what makes it so profitable. However, if you are talking about small percentages and small amounts of money, you’re not really making that much at all.
Therefore, with that in mind, it’s not an account that can do much for everybody. Like with anything, you have to approach an investment expert to see if it’s worthwhile for you. You have to make the decision for yourself because you are not always going to get a positive outcome.