Changes to Smart Builder IUL Policies Impacted by Updates to Section 7702

Earlier this year, North American shared a field bulletin and FAQ surrounding Section 7702 after the passing of the Consolidation Appropriations Act, which included a change to the rates used in determining whether a policy qualifies as life insurance. These rates are also used to evaluate whether the policy qualifies for preferential tax treatment of distributions from the policy. As a result of changes to Section 7702, life insurers, including North American, are updating rates on impacted products issued on or after January 1, 2021.