Powerful Ruling for Life Insurance: IRC Section 7702 Revisions


The Consolidated Appropriations Act, signed into law December 27, 2020, includes changes to the tax code that will reduce the minimum interest rate assumptions insurance companies may use. These changes will affect the definition of insurance including:


  • The Guideline Premium Test and the Cash Value Accumulation Test under Internal Revenue Code (IRC) Section 7702 and;

  • Modified Endowment Contracts under IRC Section 7702A


Once implemented, the reduced interest rate assumptions will allow for increased premiums for new permanent life insurance policies acquired utilizing these revised rates. TRC Financial is evaluating the impact of the updated rates with carrier partners and will be monitoring industry reactions to the rate changes as we move forward.


We will provide additional updates on section 7702 and impacts to our product portfolio as they become available.


Copyright © 2021 TRC Financial. All rights reserved.

TRC Financial Insurance Services and affiliates are presently licensed to sell insurance and annuity products, as well as other securities products in the following states: Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Idaho, Illinois, Iowa, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Virginia, Washington, West Virginia and Wisconsin. Residents of other states should consult with a local registered representative for insurance services and securities products. Proper state registration is mandatory prior to conducting business in that state. This is not an offer to sell securities, which may be done only after proper delivery of a prospectus and a client suitability review. CA License - #0E14614 \ CA License #0B40789 \ CA License #0B52893 - The principle place of business and the state of domicile for TRC Financial is: 1 Post, Suite 150, Irvine, CA 92618. Securities offered through Registered Representatives of M Holdings Securities, Inc., a Registered Broker/Dealer Member FINRA / SIPC. Check the background of this Firm and/or investment professional on FINRA's BrokerCheck. TRC Financial is independently owned and operated and is a Member Firm of M Financial. Please go to www.mfin.com and click on “Disclosure Statement” at the bottom of the home page for further details regarding this relationship. For important information related to M Securities, refer to the M Securities’ Client Relationship Summary (Form CRS) by navigating to https://mfin.com/m-securities.

(949) 509-2940

M_MemberFirm.png