Description: The interaction of section 7702 cash value accumulation test [CVAT] and state nonforfeiture laws [SNFL] create a dual limitation on traditional life insurance contratcs. CVAT limiting the maximum permissible cash value and SNFL requiring a minimum cash surrender value. This article examines these dual limitations.

Description: To most observers, the value of a life insurance contract is the cash surrender value. However, when it comes to life insurance and the Internal Revenue Code, things are seldom as simple as they appear on the surface.