Definition

DEFRA

The Deficit Reduction Act of 1984, which enacted §7702 and defined life insurance for federal tax purposes.

Full definition

The Deficit Reduction Act of 1984 (DEFRA) added IRC §7702, the statutory definition of a life insurance contract for U.S. federal income tax purposes. §7702 imposes the cash-value corridor and either the CVAT or GPT premium/cash-value tests that every PPLI policy must satisfy.

Related terms

IRC §7702

The federal tax definition of a life insurance contract — the gateway to all life-insurance tax benefits.

TAMRA

The Technical and Miscellaneous Revenue Act of 1988, which enacted §7702A and the seven-pay MEC test.

GPT / CVAT

The two §7702 tests a life insurance contract can use to qualify.

Availability, tax treatment, and policy design depend on jurisdiction, carrier, investor qualification, and applicable law. simpleppli.com provides general educational information only — not tax, legal, insurance, or investment advice. Consult qualified tax counsel, insurance counsel, and licensed insurance professionals before implementing any PPLI structure.