770 Account Revealed – Tax Free Retirement?

770 account

770 Account Revealed – Tax Free Retirement?

770 Account, 770 Investment Account, Babylonian Money Code, The Secret Investment Account, the Magic Contract and Tax Free Retirement.  It's being called by many names.  But what exactly is it?  Maybe you know it by a different name? It's life insurance of course!  Whole Life Insurance or Permanent Life Insurance to be more specific.   Not Term Life Insurance. Whole Life has steeper premiums then Term Life Insurance.  The reason being is that whole life has greater benefits.  While it has roughly the same characteristics as term life, it also comes with an investment component.  These investments can include, stocks, bonds and even money market vehicles.  And.. you can borrow against it. According to “The three most common types of whole life insurance are traditional whole life policies, universal and variable. With both whole life and term, you can lock in the same monthly payment over the life of the policy.”

This article is about the secret 770 Account being touted by many and it's relation to whole life insurance. It references two opposing views by authors Suze Orman and Barry James Dyke.

Secret 770 Account

Is Whole Life As An Investment Vehicle Right For You?

There are varying opinions on investing in whole life.  Of course, if you ask your local insurance agent, he will agree that is any type of life insurance is an excellent investment. Suze Orman wouldn't agree with him: This a good 6 minute video with a much opposing view from the best selling author of Pirates of Manhattan 1 and 2: Maybe you should look at other investment avenues for you money because whole life seems to be complex and expensive.  Then again, why would, as pointed out in the video, some of the richest men and corporations in the world be investing so much whole life? The 770 Account approach, in a nutshell, is to invest in a type of whole life or permanent life insurance policy.  This allows you to put away tax free income, collect dividends (if the investments in the policy are profitable) and compound, borrow against the “cash value” of the policy and be able to pass a considerable amount of wealth on to your next generations. It is our understanding that life insurance is considered a security and can only be sold through licensed brokers or agents.  Each policy is different as it relates to the different underwriters.  The term fine print seems to have been invented by these guys.

A similar and very popular investment product that you can ask a financial adviser about is Tax Deferred Annuities or tax deferred income.  But not all annuities are equal. Take a look at the graphics below as an example:


Tax Deferral Chart

tax deffered annuities

Amazon Book

Questions and Answers On Life Insurance

Underground Wealth Account

Now that we have identified that the secret “770 Account” or “Underground Wealth Account” is actually whole life insurance, let’s take a look at what it would be used for in an investing scenario. When people think of life insurance, they think of hedging against disasters. An assurance that their family will be taken care after their death. While the whole life insurance plans do have these factors, in this situation it is being used for protecting wealth and tax-avoidance while saving at the same time.

As stated previously, it does have the insurance factor to it, as in the case of your death, however, in this scenario it is used to pass along wealth to the next generation with little or no tax (as far as we understand it). And, in contrast to an IRA account it doesn’t have a limit as to how much a year you can place into this “account”.

So let’s say that you purchase your policy form a mutual owned company, like USAA or State Farm. These companies payout dividends to their policy holders. Your whole life insurance policy can now start to compound with your premiums and your dividends.

If used as an investment vehicle, they should be considered extremely long term. As the ROI only starts to materialize many years down the road. You may never benefit from this, however, your kids could come out handsomely.

It should be noted that you can borrow against your whole life policy. Because it carries a cash value. Term life policies, traditional do not carry cash value. Like any other loan you would take the interest rates and fees into consideration when looking at this. Just be sure you have a plan to pay anything you borrow back.  So will you jump onto this Babylonian Money Code?

How many people do you know that have whole life insurance?  How many of those people utilize it as an investment vehicle successfully?  Why is it, the only compelling examples of whole life being successfully used as an investment are of the large corporations and wealthy businessmen? Maybe Suze Orman is right.  If you don't have a significant amount of money to start off with, you may just want to find another avenue to make some more immediate profits.  It seems the benefits and advantages of these 770 Account investments materialize 10-15 years down the road. Definitely a long term investment. Related retirement income reading: 10-86 Plan Little known tax “loophole” could triple your investing income.

Keywords: Description:
Life Insurance Investment vechicle sold by licensed agents. insurance that pays out a sum of money either on the death of the insured person or after a set period.
Tax Free Good, service, income are exempt from tax.
Term Life Term life insurance or term assurance is life insurance that provides coverage at a fixed rate of payments for a limited period of time, the relevant term. Another type of investment vechicle.
Social Security Any government system that provides monetary assistance to people with an inadequate or no income.
401 k Retirement savings plan sponsored by an employer. It lets workers save and invest a piece of their paycheck before taxes are taken out. Taxes aren't paid until the money is withdrawn from the account.
IRS Code Federal tax law begins with the Internal Revenue Code (IRC), enacted by Congress in Title 26 of the United States Code (26 U.S.C.).
Life Policies A life insurance policy is a contract with an insurance company. In exchange for premiums (payments), the insurance company provides a lump-sum payment, known as a death benefit, to beneficiaries in the event of the insured's death.
Mutual Funds A mutual fund is a company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt. The combined holdings of the mutual fund are known as its portfolio. Investors buy shares in mutual funds.
Secret Investment Term used to market the 770 Account which actually refers to a type of life insurance policy.
Life Insurance Policy A life insurance policy is a contract with an insurance company. In exchange for premiums (payments), the insurance company provides a lump-sum payment, known as a death benefit, to beneficiaries in the event of the insured's death.
Permanent Life Insurance Provides lifelong protection, and the ability to accumulate cash value on a tax-deferred basis. Unlike term insurance, a permanent insurance policy will remain in force for as long as you continue to pay your premiums.
Term Life Insurance Term life insurance or term assurance is life insurance that provides coverage at a fixed rate of payments for a limited period of time, the relevant term.
770 Account Strategy After you figure out that the 770 Account is actually Whole Life Insurance you can set a plan with your financial advisor matching your investment goals.
Secret Investment Account Teaser used by marketers to sell a financial related product or service, normally a newsletter subscription or membership.
Tax Free Income Specific investment products and services that produce income that is tax exempt. Govt. may use this as incentive to invest in their bonds to raise money.
7702 Tax Regulation Internal Revenue Code section 7702 sets limits for how much cash value can be allowed and how much premium can be paid (both in a given year, and over certain periods of time) for a given death benefit.

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Written by John Thomas

I began my investing career back in 1998. I quickly discovered day trading, small cap and penny stocks. I was the editor of my own investment newsletter, stock promoter, investor relations, public relations and have witnessed the back-end process of taking a private company public through reverse merger and registration. That is roughly over a decade in a nutshell. During this time I learned how to identify the rats, sharks and people who truly want to help you learn about investing. Now I do research and write.
My hope is to pass along nuggets of information that could help or the very least entertain you on your way to financial success.

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