Section 7702 cash value accumulation test (CVAT) is one of the two primary tests under Internal Revenue Code Section 7702 for determining whether a policy qualifies as life insurance for tax purposes. Under CVAT, the policy's cash value at any time cannot exceed the present value of future benefits determined using prescribed interest and mortality assumptions. This effectively limits how quickly cash value may grow relative to the death benefit. Policies designed under CVAT often require death benefit increases if cash values rise rapidly, helping maintain compliance while allowing flexible funding. Failure to satisfy the test can cause a contract to lose its tax-favored status, making inside buildup taxable each year.

Actuaries choose the Section 7702 cash value accumulation test when they want product designs that support aggressive funding and strong long-term cash value performance, particularly for accumulation-focused universal life and indexed UL products. Advisors may not see the internal math, but they notice that CVAT-based policies often increase death benefits automatically when large premiums are paid. In advanced planning, wholesalers explain that CVAT can help support high early funding while still meeting 7702 limits. Understanding the cash value accumulation test helps advisors differentiate between CVAT and guideline premium test designs and discuss implications for funding patterns, death benefit options, and long-term flexibility.