770 account

By xiexgp@gmail.com, November 20, 2013

This is a discussion topic or guest posting submitted by a Stock Gumshoe reader. The content has not been edited or reviewed by Stock Gumshoe, and any opinions expressed are those of the author alone.

what is a 770 account that bankers use to quad their money ? John O

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    1. Edgar Arceo
      Nov 25 2013, 07:38:11 pm

      This “770 account” is not more than Permanent Life Insurance with a twist – maximizing your Life Benefit and not your Death Benefit. There are many factors that need to be in place before the life insurance policy can turn into a “770 account.” It needs to be from a Mutual Insurance company (Participating Whole Life Insurance), it needs a paid up additions rider, you will need to be on the MEC line of the policy (I will explain later), and it works better with non-direct recognition, etc.

      When structured correctly, you will get the following benefits: No risk, Guarantees, no penalties, liquidity use and control of your money, protected from creditors, leverage, tax deferred growth, tax free distributions, competitive rate of return, collateral, disability benefits (until age 65), and Death Benefit that will go to the heirs tax free. (I won’t go over every benefit on this letter, but if you need explanation of any of these terms, let me know)

      Also, when getting this type of life insurance policy, you are doing this for the LIFE benefit (tax deferred growth, tax free distributions, protection against creditors, liquidity, etc.), not for the death benefit. So you will want to get the minimal death benefit you can for the monthly/yearly premium you can put in. (We have had clients that put as little as $5,000 a year and as much as $500,000+ a year). When you get the minimal death benefit possible for your money, then you are maximizing your cash value and your LIVING benefits. As opposed to buying a life insurance policy with the maximum death benefit you can get, where you will see a ZERO cash value on your policy for the first 3-5 years. This is what the average insurance agent wants you to get, because that will maximize his incentive (and because they probably don’t know better).

      The great thing about the rate of return that this account offers is that is steady. Based on my average client who is 45 years old, and based on the low dividends that the companies are paying today, he will receive a rate of return at retirement of 5.5% every year (which is better than 95% of the mutual funds/index funds in the last 15 years). But the KEY ingredient is that it is TAX FREE, so if you want to match that with a mutual fund, you will need to get an 8% rate of return EVERY YEAR (with no negative years – which is almost impossible, considering that the market is so volatile, and the management fees and other hidden fees that they charge is about 2-3%). There are other things that are great about this “770 account.” One more thing I want to mention is that is not reportable to the IRS. (Tax treatment of life insurance – Document: GAO/GGD-90-31 IRS code) This will make your tax bracket lower – paying less tax from your other retirement incomes, including Social Security.

      For more information, please send me an email edgar@arceofinancial.com or visit our website http://www.arceofinancial.com and leave us a message.

      God Bless you!!

    2. Matt Brightman
      Jan 22 2014, 10:47:29 am

      We can provide all the neccesary info such as minimums and how this actually works. Henry & Charles please call us at 781-398-8576 for some basic info.

    3. MAtt Brightman
      Feb 1 2014, 01:59:42 pm

      Its a little more complicated than that. It has to do with who the insurance is on (Age, health, etc) and what kind of money is going into the plan.

    4. Matt Brightman
      Feb 6 2014, 10:48:17 am

      Lowe, the deal is that all major banks have cash value life life insurance included as an asset class in their overall portfolios . I have the medical economics article that shows how much money certain banks hold in cash value life insurance ( which is what a 770 account concept is)

    5. David Guzzardi
      Feb 8 2014, 09:42:48 pm

      I am 56 years old, having just retired from a LEO career of 35 years. I am working part time currently and would like to know if this type of account, the 770 account would be something that would even benefit me at this stage of my life.

      • 4001 |
        frank archambeau
        frank archambeau
        Feb 9 2014, 03:42:36 am

        David; I will not hold youth against you . My long-held opinion is ‘life insurance’ is betting you die before ins.co. think you do. Other benefit is form of annuity with perhaps better benefits. I know of no sure method to even ‘preserve’ wealth in face of govt. actions for which seems to me we will have pay dearly.

    6. Jack burns
      Feb 10 2014, 12:10:50 am

      I am a veteran in the insurance business. This entire thread is about the biggest crock of sh*t ever. Don’t be duped by unethical insurance agents like Matt Brightman. To understand the concept of this investment you will need to fully understand how a Modified Endowment Contract effects it. Bottom line: Prior to 1988 this “770” concept enabled someone to extract gains from their life policy on a FIFO basis. When the IRS caught wind of this they closed the loop hole. TAMARA, enacted by congress, changed this to a LIFO basis. Furthermore, once deemed a MEC, it will be a MEC permanently and all loans or withdrawals from the policy are fully taxable and subject to a 10% penalty if you are under 59 1/2. It’s true……there is no free lunch.

        • richard biggert
          Oct 3 2014, 11:27:46 am

          Not Merrill. Contact a real planner, a Registered Investment Advisor rep. or CFP.

          Brokers aren’t educated in this. See The Retirement Miracle, Patrick Kelly.
          Or call me. 918.809.8255. I may be able to help or refer you to a competent advisor.

      • Tom Beach
        Feb 13 2014, 11:28:12 am

        Dear Jack,
        You sound like you know what you are talking about. So, I will ask you, Where you put your money to keep it growing safely and not be taxed to death?
        Notice that I did not ask for a plan to cheat on taxes or a way to make a killing in the market. No. What I and everyone else seeks is a way to grow one’s money by compounding and to avoid as much taxes as is possible. The trouble is that many of the schemes one reads are just pipe dreams. They are risky or blatantly illegal.
        So, tell me, Jack, how do you place your wealth to best advantage?
        Thanks and Aloha from Hawaii
        Tom Beach

    7. A Lowe
      Feb 14 2014, 12:46:22 am

      Jack Burns can you please tell me then why the 770 concept is even being considered for stock gumshoe? If this whole thing is hog wash can you show us the difference in before and after they closed the loop hole? Something seems a miss here as I am sure the reporting site here actually believes there is a 770 account. No one is asking to do things illegally, however if it is allowed by some it should include all of Americans that need to enhance their income especially since unscrupulous entities ave crashed and dashed the hopes of an enjoyable retirement, and are now working as greeters at their local walmart.

    8. 4001 |
      frank archambeau
      frank archambeau
      Feb 14 2014, 04:03:37 am

      In regard to post(15) by Jack burns IMHO he tells it like it is. If you have not figured it out by now it surely seems to be Govt. policy to have you die penniless or else leave nothing to pass to grandchildren. ” Them that have don’t want you to have.” Have you considered that ‘beloved leadership’ govt.class/political elites are mostly all 1%ers. Pretty exclusive club;You are not invited to join…

    9. Paul
      Feb 20 2014, 06:28:53 pm

      As Edger Arceo said on November 25, 2013 it’s basically Permanent Life Insurance with a Cash Accumulation feature for the insured that can earn income tax deferred in a Fixed Account earning an interest rate of return from 4.00%-5.00% and minimum guaranteed interest rate of 1.00%-2.00% in all down Markets or the insured can allocate the premiums into different major stock market indexes like the S&P 500, Dow Jones, Hang Seng, EURO STOXX 50 or MSCI Emerging Markets while greatly limiting your losses to a 0.00% guaranteed floors. This protects your principal from losses while others may suffer the same losses as the Market.
      To read more about this IRS-approved retirement savings plan google IRC Section 7702.
      The life insurance industry has the best IRS-approved retirement savings plan today—and most investors know nothing about it. This retirement savings vehicle is not a company-sponsored, pre-tax qualified, 401(k)-type plan. It’s also not a Roth. It’s not an annuity or whole life. Despite sales of well over $1 Billion in 2011 for the top 39 carriers surveyed, it is the financial industry’s No. 1 secret—Indexed Universal Life (IUL).
      Indexed Universal Life’s basic principles:
      1. Can be funded with after-tax monies or pre-tax monies, as in a defined-benefit pension plan.
      2. Assets are protected against market loss and backed by the full faith and credit of the issuing company. While the funds are not FDIC-insured, “legal reserve” requirements apply with the insurers.
      3. Assets are “linked” to the market via the selected index: Dow, S and P 500, Global, or a mix of several indices.
      4. Any gains, being real, interest-bearing gains (subject to a cap), are locked in and never given back: the policy holder accrues a gain, or a zero (in the case of a down market), but never a market-induced loss.
      5. Historical returns, based on actual illustrations from the top carriers going back to the late 1980s, are usually somewhere between 7-9%, mean actual interest rates of return.
      6. Income can be pulled out prior to age 59.5 and is “tax-free.” A withdrawal is considered a policy loan against the death benefit, which acts as collateral.
      7. The death benefit is paid out to the beneficiary tax-free.
      If you would like to see a video that will explains clearly what an Indexed Universal Life is compared to your 401(k), Pension or IRA go to youtube.com and type in the search window: Indexed Universal Life Contract-Part 1, Part 2, & Part 3. There are three videos which are about 8-9 minutes in length. After watching these educational videos you’ll want to contact a life insurance agent.
      Many have asked, why haven’t so many Americans heard about this, well that’s because many Financial Adviser themselves either don’t have a Life license to know or they themselves do not know. Many of your CPA’s and CFA’s many not be aware also. One of the major qualifications for this retirement savings vehicle is that not everyone can qualify for this because it’s a life insurance policy with tax advantages under IRC Section 7702, which one must qualify with a medical exam and uderwriting requirements.

    10. Stella Fitzpatrick
      Feb 20 2014, 11:40:30 pm

      After reading the comments made here, saying that I am confused would be an understatement. I am a 56 yr old woman….whose financial situation is not good. However, with that said, I am getting the impression that this 770 account is something that could or would benefit me in the long run. My question is how would myself and my husband who is 59 get the exact facts on this 770? Jack Burns stated it was B….s, and used letter abrevations that I had no idea what they meant….so at the end of the day….can someone who head is just under the middle class line benefit from this? And if so, how do I go about it???

    11. Dean Owen, CPA, PFS
      Feb 28 2014, 09:53:15 pm

      I personally feel this is a scam. I am a CPA and Personal Financial Specialist. The scam is what you are NOT being told.
      Its just high commission life insurance. The “secrecy” stuff is just sales pitch, nothing more.
      If you want money advice, follow the advice here:

      PS – I hold life insurance license, by law, if I sell an insurance policy, I must first guard the best interest of the insurance company, not my client. The insurance company pays me, I have a duty of care to them.

      Go to aboutcom, look up SUITABILITY vs FIDUCIARY.

      It makes a difference if you are getting advice from a high commission sales guy, or a fiduciary.

      • Sean
        Mar 2 2014, 08:58:51 pm

        This is sad that even some of these ” CPA’s” & “Financial Professionals” know nothing about what they’re are talking about. This is hands down the best bang for your buck with NO RISK. I’m not going to go into great detail, but I have been in the industry for a short 5 years & running into other “Financial Professionals” who have never even heard about this is a huge disservice to the people they “help”. If you are serious about your retirement and you have some love for those around you that need help, I would love to talk with you to see if there is anything I can do to better your situation and I would be more than happy to answer any questions you might have.
        Contact me at FrodesenFI@hotmail.com

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