The Power of Private Placement Life Insurance (PPLI). Maximize wealth. Enhance after-tax returns. 

Private Placement Life Insurance or “PPLI” is a form of universal life insurance. PPLI includes a signficant investment element if policyholders maintain a sufficient amount of life insurance within the policy as required by tax law. PPLI is an insurance solution for wealthy investors that can enhance the after-tax returns of alternative strategies and other investments that may generate substantial taxable income. PPLI offers tax-deferred compounding and a tax-free death benefit.

Policyholders can make potentially significant contributions to PPLI, subject to insurance underwriting. Plus, there is potential flexibility in the amount and timing of deposits. Maximum annual contributions are determined by IRS guidelines, required life insurance premiums, and insurance market capacity.

To access PPLI, policyholders must go through underwriting. First, insurers evaluate the health of the insured to determine eligibility and pricing. Then, applicants must demonstrate proof of economic need for insurance. Also, applicants must show an insurable interest; the purpose of the policy must be to protect against economic loss or other hardships.

PPLI offers potential flexibility for the liquidity needs of policyholder, but policyholders must plan withdrawals carefully to avoid triggering tax. Income and gains within PPLI are tax-deferred, and withdrawals up to cost basis are not subject to tax. However, deferred gains and earnings are subject to income tax at ordinary rates if policy is fully surrendered. Properly structured loans may be utilized to access policy cash values without current tax if the policy meets certain criteria. Using loans, policyholders may access approximately 80% to 85% of PPLI account values without triggering current tax.