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Section 7702 Life Insurance Defined - Tax Free Income
For purposes of this title, the term “life insurance contract” means any contract which is a life insurance contract under the applicable law, but only if such contract—
(1)meets the cash value accumulation test of subsection (b), or
(2)
(A)meets the guideline premium requirements of subsection (c), and
(B)falls within the cash value corridor of subsection (d).
Section 7702 defines life insurance. A properly structured life insurance contract is not taxable when cash values are borrowed or death benefits are paid to beneficiaries.
