Private Placement

Life Insurance

A CUSTOM, TAX-ADVANTAGED ESTATE PLANNING TOOL FOR ULTRA-HIGH-NET-WORTH CLIENTS

Private placement life insurance (PPLI) is a customized version of variable universal life insurance that is individually negotiated with a life insurance company, as opposed to an off-the-shelf product. When properly designed, a PPLI policy can provide both tax-free wealth growth and solid estate protection for your clients’ heirs.

PPLI policies are usually very large with total premiums paid usually in excess of $5 million. They are generally offered only to qualified investors who have substantial investable assets (usually $20 million+), a documented investment track record, and certain income levels. Because of PPLI’s tax benefits, potential pricing advantages and investment selection, they can sometimes be more efficiently used in estate planning scenarios than similar off-the-shelf products.

WHEN STRUCTURED PROPERLY, PPLI CAN PROVIDE HIGH-NET-WORTH POLICYHOLDERS WITH:

TAX
BENEFITS
INSTITUTIONAL
PRICING
LOWER COMMISSIONS
AND FEES
GREATER CHOICE
IN INVESTMENT STRATEGY

TAX BENEFITS

Tax-deferred growth of the cash value of the policy
Tax-free access to accumulated cash value via policy loans or withdrawals when structured properly
Tax-free transfer of wealth to heirs via the death benefit, provided the policy is established within a life insurance trust separate from the policyholder’s estate

INSTITUTIONAL PRICING

Because PPLI is sold only to people who are highly likely to keep their policies up to date and retain them for the long term, providers are able to offer PPLI policyholders significantly lower premiums than the general public would pay for similar coverage.

LOWER COMMISSIONS AND FEES

PPLI transactions generally involve substantially lower commissions and fees than those associated with publicly offered policies.

GREATER CHOICE IN INVESTMENT STRATEGY

Since every policy is customized, PPLI policyholders can seek out providers whose investment strategies align well with their own financial goals. Often, the provider will offer the investor the choice of several hedge funds or other investment options.