Section 7702 was added to the Internal Revenue Code in the mid 1980’s. It was the first formal attempt by the IRS to define what is (and isn’t) life insurance and entitled to the tax benefits associated with life insurance (tax deferred cash value buildup, tax free death benefits and non-taxable access to cash values via borrowing). It codified a definition for whole life (an existing life product) and created an totally new set of rules allowing for a new “universal” life product structure. Almost three decades later “index” universal life was created. It addresses the volatility problem inherent in “variable” UL creating a hybrid product that uses index options as the investment engine driving cash value growth. It offers upside cash value growth potential beyond what interest rates offer (with whole life) with downside protections not available in variable life. Perhaps the perfect cash value life insurance product. At least the best ever designed to date.