What is the Secret 770 Account…

By | July 22, 2013

What Mark Ford is promising in his latest pitch for the Palm Beach Letter, is about an account that’s been used by the wealthy. And by “six different U.S. Presidents,” including John F. Kennedy and Franklin D Roosevelt, whose pictures aplomb some of his ads. The sales pitch is all about generating interest into an “IRS-exempt” retirement income, for folks who are looking for a better retirement.

So here is the explanation… Dyson calls it the “770 account” to make it seem enigmatic (that’s what makes it intriguing also), honestly, it’s a cryptic on its own, even if you don’t give it a devious name.

I think, similar insurance products are already being touted by lots of sleazy infomercials, whose potentials make you wary, with names like “Bank on Yourself” and “Infinite Banking” and such.

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I’m pretty sure Tom Dyson is talking about some kind of life insurance here, well not just ordinary life insurance (that makes sure your family’s not impoverished if you die), but probably a precise class of enhanced permanent life insurance that is called “whole life.” Rather it’s more of a wealth protection and tax savings policy.

Whole life insurance is typically an arrangement between you and the insurance company, where they promise to pay you an assured sum when you are no more. And the contract never expires as long as you are making the payments.

Well, that clearly defines the payments are larger than that of, typical term life insurance policies, as a term policy expires at some point in time — and a term life insurance policy practically never pays you and, so it’s apparently cheap.

That’s because you’re young and healthy and the policy expires when you’re 55, that’s when mortality risk takes you over. Pretty confusing eh? Please bear with me as this write up is meant to cover folks who understand insurance, and are on the lookout for a better retirement solution.

Read the other part…

Update by Mark Submitted on January 1 2014  Anything over your COI is considered an over payment of premium. That is why it is not taxable. You are giving the insurance company your extra funds which you can certainly borrow and the interest is credited to you because it is your own money you are borrowing. Makes sense doesn’t it.

With the extra money you are depositing in the insurance companies account, they use that in the stock, bond and insurance markets to make money, pay you back a dividend of 5-6%, which again is your own money that they are using to create growth and then claim it is not taxable by the IRS.

Your own net cash is truly non-taxable because it is net cash which has already been taxed. The only time you benefit is from the death benefit which will be sent to your beneficiaries, certainly not to you. The insurance moguls have actuary tables that show almost to the millisecond when you will pass.

If something unforseen happens then they lose, but the probability of that happening is calculated almost 100% accurately. Thus, they never lose. Check out the largest buildings in every major U.S. city.

Most share insurance company or Bank names. The tax umbrella of whole, universal, indexed universal etc. policies does have a place, but I have never made money on insurance policies.

Update by Howard  14 December 2013:

I know exactly what this is. It is legal, effective and an investment strategy. It is a Universal Life Insurance policy at the core, with some added bells and whistles. People who use this strategy are typically not looking for life insurance but for the cash accumulation (100% tax free, unless you add too much money and turn it into a MEC – which you want to avoid).

Think of Universal Life, as having 2 halves. The first half is Cheap (Term) Life Insurance. Depending on your health, the mutual company will rate your “Cost of Insurance a/k/a COI”.

So if you invest into a 100k policy and your COI is .40, you are paying $40.00 a month for a 100k life insurance benefit – which pays at death, 100% tax free but, that’s not all.

The Second half of the policy is a tax free, guaranteed return account. This account can be indexed to follow indexes, such as Mutual Funds. Realize these are clone accounts, in that they are not the exact Mutual Fund, where you can earn and lose money.

The second half of a Universal Policy is guaranteed to pay a “floor”, typically 4-5% annually. You cannot lose money EVER! Earnings grow tax free and can be “borrowed” out of the account at any time after an initial 2-5 years of “seasoning” your account.

When you “borrow” money from your account it typically costs like 2% but remember, you’re earning a guaranteed floor – so you’re still earning money!

There are many advantages to have a Universal / Variable Universal Life Insurance Policy. You can “hide” lots of cash in it, without the IRS ever knowing it’s there – as long as you NEVER OVERFUND it.

As an example, if I had a 100k policy and had a COI of .40, than every dollar I “deposited” over $40.00 a month, would go into the cash savings half of the policy. If I sent in $250.00 a month, then $210.00 every month would go into the savings portion and grow tax deferred @ a guaranteed floor of 5%, some years you will earn closer to 7-8%, depending on the clone you are indexed to.

And that’s where you have a few options to make.

Keep in mind, you cannot add any amount you want, there are strict guidelines for maximum monthly contributions, hence “over funding = MEC”. MEC negates tax advantages and is why people might own several of these accounts at once.

It’s really a fantastic investment tool. The IRS has wanted to go after these accounts for decades but, so many people in the Government have these accounts and huge lobbyists such as the AARP have defended these accounts.

I do not sell life insurance anymore but, I agree that these accounts have a place in every investment portfolio.

Update by Anum 1 December 2013:

You could defer the realization of income by using the cash advanced against the surrender value, but then you have to pay interest on the loan. So the idea that there is some unadvertised “secret” plan is (of course) pretty much expected from newsletter vendors.

IRS Section 7702 by the way is used for the purpose of calculation of taxes relating to Life Insurance. There is no such section 770 of the IRS. It seems they have used the number to create a clandestine around IRS section 7702 while deliberately leaving out the last digit to mystify the pitch.

An Update to this by  Roy Torres: 14 Nov 2013
It’s universal  index life that invests your money in the stock market, ironically, but is managed with a stop loss in place so that you get a guaranteed 6% or more and the insurance company keeps any additional profits.  The insurance company will actually guarantee it because they will make more.

Permanent Life Insurance policy with a Paid Up Additions Rider essentially does turn you into your own bank where you can finance all of your own purchases and pay the interest back to yourself through these specially designed policies after it is seasoned for 5 years.

They can’t call it an investment however and so no one knows that it is a great “investment”.  Plus, if you die or reach 100 years of age, a lump sum payout will be in order that will far exceed your buy in.  Brokers get a commission just like any broker who sells anything does.

Any money you borrow against it, is charged interest but the money is yours so the interest you pay actually gets credited to your account.  So effectively, you become the bank.  Just like a 401k, if you borrow from it, the interest you pay gets credited to your account.

It’s not new or any secret, but like all insurance, it is  highly regulated.

Update by Craig Sedery November 20, 2013

There are two major forms of life insurance – Term and Paid-up Term insurance is the newer version of the two. Then there are versions of each that can provide services to different scenarios. Term insurance is temporary insurance where the amount of the insurance premium versus the insurance benefit is based on the age of the insured.

Paid-up insurance premiums are based on a person’s longevity and the type of plan you are applying for. In Paid-up you can have Single Premium Purchase, Age 65 Paid-up and Whole Life Insurance, each provides different types of coverage.

AND the newest of the insurance plans is the Universal Life Insurance plans which are a hybrid of Term and Paid-up. your premiums are held in an account and the insurance is term insurance. the account allows for surplus while you are young, this surplus is used to help pay the premiums as you get older. Contact your insurance agent for the best fit for your needs.

In summary – Term Insurance is a good buy as long as all you need is to provide a death benefit, paid-up is more expensive but can give you more options. Best of luck to all!!

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32 thoughts on “What is the Secret 770 Account…

  1. American Spirit

    Actually, there are bank accounts, special savings accounts open to the general public or those who qualify, IF you know about them and walking into a bank or calling a bank, will not get you the information you want. These accounts are kept “secret” by the banks and they only discuss them with those who have large deposits and etc. at the banks.

    We are not sure that even insiders will reveal these secret accounts to members of their family outside of the immediate family.

    However, it would be interesting if those who do know about them would reveal the accounts and what they are. IF you know the account type, the bank is pretty much obligated to discuss the account information with you but again, if you don’t know the secret name of the account, you will not get very far.

    So we are watching for those who do know and who believe all should have the same access to reveal the information to the extent we can at least inquire and get straight answers from the bankers.

    What a shame as we well remember a time when all account information was shared with everyone. Now it is a world of the ELITISTS, those who have keep it secret from those who have not.

    Why not share it so all can reap benefit? If my having the same type of secret account that y ou have does not interfere with your benefits from that account, why are you so little as to try to build yourself ego up by keeping it a secret?

    IF that type of thing helps one feel better about themselves, they must not be much of a person.

  2. B

    So if someone is in thier mid-60’s, is it too late to get into one of these “guaranteed life policies?” or what would be the recommendation for a person at that point in their life when they are ready to retire and have a small retirement in place but not one that is adequate to be sustaining by itself? Should they purchase a policy and if so, what kind?

  3. Rod Hyde

    The key is understanding how a whole life or indexed universal life policy works and reasons why they could be a great benefit to all who would choose to understand…

    For years whole life policies were sold but rarely were written with the all important Paid Up Additions Rider. The IRS regulates how much money one can invest in a life insurance policy.

    If one contributes too much they create a Modified Endowment Contract or MEC which will now be subject to similar rules of Qualified Plans such as IRA, 401k, 403b and the like. The advantage of whole life or indexed universal life is that the MEC limit can be customized depending on age, amount of insurance and rating class.

    Whole life can be very expensive but does allow a term rider component which helps expand the MEC limit and provides necessary coverage desired. Perhaps in a blended policy of whole life/20 yr. term one may have a base premium of $5,000 annually but a MEC limit of $30,000.

    If one had the Paid Up Additions Rider they could choose to contribute $25,000 extra towards their policy but not a penny more to preserve the non Modified Endowment Contract. These types of policies will typically have all cash contributed available in the “cash value” by year 5-7 if designed properly.

    If the overfunding didn’t happen it would take twenty plus years to get all cash back. Also, one needs to be aware that his 20 yr. policy would drop off leaving him with only the whole life portion and increased cash value.

    It is very important to overfund via “paid up additions” or in the case of an IUL, contribute premiums up to the MEC limit to experience great growth and increasing death benefit in these types of policies.

    A wonderful advantage over other accounts is that the policy owner always has at his option a guaranteed loan of at least 90% of the cash value. The policy holder receives a dividend annually that can automatically purchase even more paid up additions which increase death benefit dollar for dollar as contributed.

    The dividend rate in most companies is at least 5% currently. Loans from these policies are actually from the insurance companies “General Account”, amortized interest is charged. All interest paid goes back to the insurance company, not to the policy holder. Policy loans are secured by the increasing death benefit which also encompasses the cash value, any loan plus interest not paid would be treated as an advance from the death benefit should one die.

    When one grasps the difference between “compound interest” and “amortized interest” he will see the importance of having such a vehicle in his portfolio. Compound interest will always out pace amortized interest; over the life of a policy the numbers become great and in most states will pass on tax free while providing a living benefit that can be accessed and paid back as often as desired.

    Many turn on a retirement via a loan that they never pay back and avoid taxes on any growth because it is not earned income.

    My desire was to clarify how these plans work. For those who would like to contact me… my email is rodh@premieralliance.net

  4. Marsha Westbrook

    I am over 56, is this still a good investment and a sure thing? I am looking for a place to invest my money.

  5. Anonymous

    I’m legally blind; I was listening to your program on my computer about the 770 accounts; I’m interested in purchasing it for the $39.00 a month for a year;

    Because of my vision I had a hard time locating and following the speaker! Can you sign me up another way Please?

    1. william c clarke jr

      I signed up for palm beach letter and was promised 4 reports immediately, the most important was what banks invest in the 770 report. I did not get it and have spent two days trying to get it.

      You must realize when you say you will do something and you do not do it, it is discouraging. I have paid for this report and I expect you to forward it to me even if you have to use the postal system.

      Wm c Clarke jr

  6. Ibe Truthr

    My experience with these policies go way back. If the facts haven’t changed you will find that the premium paid for these policies is significant and certainly cuts back on the size of your investment.

    Ask the agent for a print out of the investment over the first five years or more and you will see what it costs. Then ask a few questions.

    Secondly, what is the dollar going to be worth in the future. Perhaps most of us would be a lot better off putting what funds we have in the right place to survive the coming economic collapse. Don’t let their interest or dividend rates corrupt your thinking. Get down to basics. Survival first.

    If you are going to invest in insurance perhaps you should consider a policy in Swiss currency. Don’t put all your eggs in one basket. We are, as a nation borrowing almost $.50 on every dollar we spend. The intent is to bankrupt us. It is all well documented all the way back to the creation of the U.S. “Federal” Reserve in 1913.

    Most forecasters can document that history clearly illustrates a collapse and then a major war to cover up the crime is the plan.

    This plan is written up many places and is no secret. A war in Iran, or the Ukrane, or even North Korea could bring a world war and likely would. Any of those possibilities, and there are others too, would almost certainly end up in being a nuklear war.

    The true media clearly reports these real threats while the old media slides over them every time.

  7. Joe

    There is no such thing as a “Secret 770 account”. This is nothing more than a mutual whole life (ie dividend paying) policy sold by commission seeking life insurance agents.

    The majority of the “agents” who sell these policies are licensed only to sell fixed insurance products. They do not have securities licenses. Yet, they will tell you that this “secret 770 account” is something Wall Street doesn’t want you to know about. That’s a sales line. There is no truth to it. You think “Wall Street” would ignore something so fabulous? Something that could generate them so much in commissions? Come on…

    In reality, what the agent doesn’t want you to know is the excessive level of commissions they get paid to hawk this very old life insurance sales gimmick. This is not a new concept. It has been around for years, decades.

    The agent grabs a fat commission…the client is left holding a life insurance policy they don’t need…that they’ve massively over paid for and, if they are REALLY lucky, will allow them to break even on their original investment in 10-20 years. Go ahead…try to get your cash back out of this thing after you buy it…see what your are left with.

    Look at the illustration. Ask hard questions. When the agent hems and haws, fidgets or answers with more bs sales talk, you’ll understand who REALLY benefits from the sale of this concept. (hint it is not the person writing the check!).

    Here is the last vestige, the last leg the commission seeking whole life insurance agent who sells this concept will hit you with. “Well, you just don’t understand”. That is his last way to try to humiliate you into thinking you are missing on some fantastic, tax free gravy train.

    If you still think this is such a wonderful concept, engage your brain and ask yourself this question: “Why isn’t everyone doing this?”

  8. Darrel Jorgensen

    Eliminate the IRS with The Flat Tax and this type of complicated tool would become obsolete.

    1. wnettles

      You have a “flat tax” currently. How’s it working out for you. It was passed in 1986 and has been amended about 17,000 times since then.

      It is a two tiered “flat tax” with a whole lot of pork barrel revisions. Income taxes penalize the producers of wealth and reward the social parasites that do not produce anything but debt.

      A consumption tax, on the other hand, would be a much broader tax base, would tax all equally (example: The Fair Tax) and would spur economic growth, savings, and investment in this country.

  9. Anonymous

    Hahaha! A lot of People think the 770 account or 7702 account is crap!…tsk tsk tsk…the law of averages is so true lol….Jim Rohn once said “the worst arrogance is arrogance from ignorance”….good luck!

  10. Leslie Delahay

    Shortly after I retired I took out a “paid up” whole life policy. That policy has paid me 6% annually for the past 28 years. But, I have paid taxes on the dividends each year, so as I use those funds (dividends) I do not have to pay taxes on them again. This maybe what is referred to as a 770 account.

    1. Anonymous

      That’s what people are failing to mention here single prrmium or paid up whole life is what is needed for it to work as an “investment” these folks in this forum don’t seem to know much about life insurance. Briefly; buy a participating whole life policy from a mutual company. I should mention here that one has to “qualify” health-wise to buy the bigger policies producing the needed benefit. Think single premium.

  11. Robert

    The comments given here are accurate. But the best vehicle is called an “Indexed Universal Life Insurance” (IUIL) policy. I bought one of these through “Security Benefit”, but there are many Life Insurance companies that offer this particular policy.

    They are not talking about “Term” Insurance or even Variable Life Insurance. The “Indexed” part means that each year your balance is fixed and your interest gain begins again.

    But, it is not that simple. I bought this type of policy because you are GUARANTEED not to lose your money – not matter what happens in the stock market. Your account value will either stay where it began the year or go up, but not down.

    You can either select a guaranteed growth index (usually at a low interest rate) or index your growth interest rate to one, or several, different market indexes such as the S&P 500, or a basket of commodities, or many other choices.

    The account balance is guaranteed to NOT go down, but depending on the “index” performance you might not get any growth (if the index growth is negative or your account value will increase if the index goes up). See an insurance broker and specifically tell him/her you want to know what IULI policies they can offer you.

    Review several because all the companies have slight variations. As someone noted above, this is a LONG TERM investment (10 to 20 years), but once it grows, you can take non-taxable “loans” from your own policy and not have to repay the policy. Just be sure the value of the account never goes to “$0.00” or else you will have a huge IRS tax bill to pay!

    I would strongly recommend this vehicle for people in their 30’s and 40’s since Social Security might not be there for them when they retire. Also, when you die, any remaining value in the account (minus the “loans” you have taken) goes to your beneficiary tax free.

    Don’t waste your money on trying to buy the “Secret 770 Account” instruction books. Go see an Insurance Broker and get a full explanation. If your first attempt doesn’t get the right information, see another Insurance representative!

    1. Jim

      The 770 account is a dividend paying whole life policy with a mutual insurance company… Not an Indexed Universal Life. The 770 is a much better option and it’s guaranteed to “GROW” not just not lose value every year. You can access your money via loans anytime without tax consequences and your money will continue to grow as if you never touched it. I could go on and on about the benefits, but I don’t have time. Google the Infinite Banking Concept. That’s what the 770 account is.

  12. Scott

    The 770 account can be several things IUL, Whole live and VUL. Either way its a form of permanent insurance with a cash value component. The cash value can be borrowed and reinvested or used for other expenses.

    There are several good resources to help find someone to help you through the information. I would recommend doing a lot of due diligence, if your plan is set up incorrectly it will not work the way you want it to. http://www.infinitebanking.org/ http://www.bankonyourself.com/ each product has pro’s and con’s.

    These are long term strategies not for short term investing. These products are terrific when started at a young age, they take time to mature and provide significant benefits. Definitely not a scam, but not the best investment for everyone

  13. Natacha

    Everyone here has made some valid points but its always wise to speak with a financial rep. If you’re like Hugh and wish you knew about these options years ago, don’t let any more years of insecurity create fear about your financial future. Contact me for a telephone appointment (doesn’t matter what state) to discuss. Contact me at nthomasgoode@outlook.com

  14. Harold

    Buy a house, by term life. If you expire before the mortgage does term will pay off your mortgage. Price whole life then buy term and invest the difference. Retirement accounts offer tax advantages that whole life does not, and despite downturns offer better returns over the long term. You can borrow against the cash value of a whole life policy, but it takes a while to accumulate a significant cash value.

    1. Jim

      Sounds like you read Susy Orman and Dave Ramsey… That’s a good way to either go broke or wind up dependent on the government.

  15. Rene

    I am afraid it is a Maddock scheme. And at retirement age we can not afford to loose our nest egg. Low interest as it get.

  16. francis Forrester

    Well, I agree with most commentators here. I’m not sure, even though we may not know the particular product, I believe this guy is talking about an insurance product. I was thinking of seg funds since they have security guarantees. But I could be wrong.

  17. Lori

    Whole & universal life insurance policies are a bad thing for consumers. They assure the insurance company that they will be well cared for when the purchaser dies. I don’t see insurance as an investment. It’s a product that it’s wise to have while you’re young, but you should be able to put earnings away in real investments & when your term life policy expires you can kiss it good-bye because you don’t need it anymore.

    1. Roy Torres

      You’re confusing term and whole life. Universal is a form of whole life. Term life is cheap, and is only effective for a short period of time, should you die, you get paid, and if you don’t your policy will expire and you were insured but just like car insurance, you only pay for a period of time and it is not permanent.

      Whole life is more expense and provides many options that when used wisely, will allow you to do a variety of maneuvers that can be very smart. Speak with a licensed life agent who specializes in this product.

      Too many people are “web-xperts” on the internet that it can turn you off from something that may be practical in your situation. If you have very little income or are technically poor, this policy may not help you and may burden you more than provide value. These policies are for people who have some assets and incomes.

    2. Anonymous

      You are absolutely right! You might want to check out ‘Indexed Universal Life’ or ‘Passive income’. It’s an investment with “training wheels”….beginners should stay away from high risk investments unless they want to gamble with their hard earned money.

      There’s a reason why the rich gets richer and the poor and the middle class…..we’ll are almost in the rut.

      People are staying so behind on their ways of thinking….we’re past agriculture, manufacture, information and also knowledge eras….we just entered the intelligence era, so many people will lose…get updated don’t let your fear takeover, feed yourself positive infos (you deserve it).

      I just shared this info with you but I don’t want to delete it I hope you get something out of it or you can just ignore it and follow the norm. Anyway, good luck and God bless!

  18. Hugh

    He is talking about either guaranteed universal life or index universal life. All he says is true. I wish I had known about this option years ago.

    1. William

      I sold life insurance for the Federal Government, and retired after 28 years of government service.

      Whole life plans are good if one can afford them. Because when they become paid up they have enough cash value to borrow against to pay for funeral expenses, before they sky rocket, it takes 6 to 8 weeks or longer for an insurance company to get a death certificate, so a benefit can be paid out. Most places want the money up front at the time of death.

      The loved one is locked in the freezer until the money is paid, and you could be taken to court. Some policies have dividends and grow at interest rate 4 to 6% as established by co. in our case Gov.



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