Maybe you have heard of the infamous 770 Account or the Babylonian Money Code, Secret Account or even Tax Free Retirement. Regardless of what its being referred to its not what you think. An article on pennymotion.com says that it is actually whole life insurance.
Also, as explained by investopedia:
A life insurance contract with level premiums that has both an insurance and an investment component. The insurance component pays a stated amount upon death of the insured. The investment component accumulates a cash value that the policyholder can withdraw or borrow against.
As the most basic form of cash-value life insurance, whole life insurance is a way to accumulate wealth as regular premiums pay insurance costs and contribute to equity growth in a savings account where dividends or interest is allowed to build-up tax-deferred.
In the article on pennymotion.com, it has two opposing views about whole life insurance. One is by Suzy Orman who is opposed to this type of investment for the common investor, and author of Pirates of Manhattan Barry James Dyke, who is for whole life insurance investing.
The 770 Account was derived from the US Tax Code U.S. Federal Code-section 7702 which governs “life insurance contracts.” The IRS guidelines state, “A contract meets the cash value accumulation test of this subsection if, by the terms of the contract, the cash surrender value of such contract may not at any time exceed the net single premium which would have to be paid at such time to fund future benefits under the contract.”
©2015 770 Account Explained