Definition

GPT / CVAT

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

Full definition

The Guideline Premium/Corridor Test (GPT) caps cumulative premiums and requires a minimum death-benefit corridor. The Cash Value Accumulation Test (CVAT) requires that the cash value at any time not exceed the net single premium needed to fund the death benefit. Every PPLI policy elects one and lives inside it.

Related terms

IRC §7702

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

DEFRA

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

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.