Which Section 7702 Strategy Is Right for You?
Tax-Free Wealth Decision Guide
There are four primary Section 7702 strategies—Max-Funded IUL, Infinite Banking (IBC), FlexVault, and LIFT. Each serves different needs, timelines, and wealth profiles. This isn't about finding the 'best' strategy—it's about finding your strategy.
5 Questions to Find Your Strategy
When do you need income?
- →
3-5 years
FlexVault or LIFT
- →
5-10 years
IBC
- →
15+ years
Max IUL
What's your primary goal?
- →
Tax arbitrage
FlexVault
- →
Cash flow control
IBC
- →
Maximum growth
Max IUL or LIFT
Do you have external assets?
- →
$100K+ taxable
FlexVault
- →
$50K-$100K
Consider FlexVault
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Under $50K
Max IUL or IBC
What's your risk tolerance?
- →
Very conservative
IBC (whole life)
- →
Moderate
Max IUL or FlexVault
- →
Aggressive
LIFT
How much involvement?
- →
Hands-off
Max IUL
- →
Some monitoring
FlexVault or IBC
- →
Active management
LIFT
Get Personalized
Most people need a hybrid approach. Schedule a consultation for your custom strategy map.
Side-by-Side Feature Comparison
Strategy Comparison Matrix
| Factor | Max IUL | IBC | FlexVault | LIFT |
|---|---|---|---|---|
| Minimum Premium | $25K/yr | $25K/yr | $50K/yr | $75K/yr |
| External Assets Needed | No | No | $100K+ | Yes |
| Time to Income | 15+ years | 5-7 years | 3-5 years | 3-5 years |
| Complexity | Low | Medium | High | High |
| Involvement Required | Low | Medium | Medium | High |
| Growth Potential | High | Moderate | Very High | Very High |
| Liquidity | Low (15yr) | High (5yr) | High (3yr) | Medium |
| Best For | W-2 earners | Business owners | Real estate | Control-focused |
Recommendations by Profile
Time-Pressed Professional
$150K-$300K W-2
→ Max-Funded IUL
Set it and forget it. Low involvement, long timeline, tax-free growth.
Young High Earner
$200K+, Age 30-40
→ Max IUL + FlexVault
Build foundation with IUL, optimize existing assets with FlexVault.
Control-Focused Business Owner
Variable cash flow
→ Infinite Banking (IBC)
Be your own bank. Access cash, recapture interest, maintain control.
Risk-Averse Physician
$400K+, stable
→ FlexVault (conservative)
Tax arbitrage with lower risk. Optimize existing portfolio.
Dynasty Builder
$500K+, multi-gen
→ LIFT
Maximum leverage, tax-free generational wealth transfer.
Real Estate Investor
$300K+ rental income
→ FlexVault
Eliminate capital gains drag, optimize property income tax efficiency.
Airline Pilot
High but volatile
→ IBC
Build emergency fund, smooth income volatility, maintain liquidity.
Common Scenarios & Recommendations
| Your Situation | Recommended Strategy | Why |
|---|---|---|
| Age 30-40, $100K W-2, No assets | Max-Funded IUL | Build foundation, long timeline |
| Business owner, inconsistent income | Infinite Banking (IBC) | Need cash flow flexibility |
| $500K in stocks, high tax bracket | FlexVault | Tax-drag arbitrage opportunity |
| $1M+ rental properties | FlexVault | Optimize real estate tax efficiency |
| Physician, risk-averse | Max IUL + FlexVault | Growth + arbitrage, lower risk |
| Airline pilot, volatile career | IBC | Build emergency fund first |
| Executive, $300K/yr, near retirement | FlexVault | Immediate tax benefits |
Layering Multiple Approaches for Maximum Impact
Combination Strategies
| Combination | How It Works | Best For |
|---|---|---|
| FlexVault + LIFT | Core arbitrage + leveraged growth | High net worth, aggressive wealth building |
| IBC + IUL | Cash flow vehicle + long-term accumulation | Business owners building dual systems |
| FlexVault + IBC | Tax arbitrage + infinite banking | Real estate investors needing liquidity |
Advanced Layering Example
Real Estate Investor, Age 42, $500K Income
- 1.FlexVault ($100K/yr) — Arbitrage taxable brokerage account, eliminate tax drag
- 2.IBC ($50K/yr) — Finance property improvements, recapture interest
- 3.LIFT ($75K/yr) — Aggressive accumulation for legacy/exit liquidity
Total annual premium: $225K across three complementary strategies, each serving distinct purpose.
Red Flags: When NOT to Use Each Strategy
| Strategy | Do NOT Use If... |
|---|---|
| Max-Funded IUL | Need income within 10 years, Can't commit to funding 10+ years, Want guarantees over growth |
| Infinite Banking | No cash flow needs for 5+ years, Don't understand policy loans, Want "set it and forget it" |
| FlexVault | No external assets to arbitrage, Tax bracket below 24%, Can't handle complexity |
| LIFT | Risk-averse personality, Don't understand leverage, Need hands-off approach |
Minimum Entry Requirements
Max-Funded IUL
Premium
$25K/yr
Assets
None required
Timeline
15+ years
Complexity
Low
Infinite Banking
Premium
$25K/yr
Assets
None required
Timeline
5-7 years
Complexity
Medium
FlexVault
Premium
$50K/yr
Assets
$100K+ taxable
Timeline
3-5 years
Complexity
High
LIFT
Premium
$75K/yr
Assets
Varies
Timeline
3-5 years
Complexity
Very High
Matt Nye's Decision Framework
20 Years Matching Clients to Strategies
There's no universal "best" strategy. I've seen Max IUL crush it for one client and underperform for another with identical income. The difference? Timeline, existing assets, involvement preference, and risk tolerance.
My general framework: If you have taxable assets generating returns, start with FlexVault—the arbitrage is too powerful to ignore. If you need cash flow control, IBC makes sense. If you're building from zero with 15+ years, Max IUL is your foundation. If you want maximum firepower and can handle complexity, LIFT.
Most high-net-worth clients end up with 2-3 strategies layered. One policy isn't enough to optimize every goal. Think of it like a portfolio—diversification across tax-free strategies creates the most robust wealth plan.
Frequently Asked Questions
Get Your Personalized Strategy Recommendation
Every situation is unique. Let's analyze your income, assets, timeline, and goals to determine which Section 7702 strategy (or combination) maximizes your tax-free wealth.