Important advantages of using Private Placement Life Insurance, (#PPLI)
- Protects assets with segregated account legislation
- Protects assets from claims of creditors
- Protects assets using the benefits of life insurance
Private Placement Life Insurance (#PPLI) is a powerful tool for international tax planning, (#EWP), and asset protection. PPLI is a type of life insurance policy that is tailored to the specific needs and goals of high-net-worth individuals, (HNWI) and families. PPLI offers several advantages over conventional life insurance, such as:
– The assets inside a PPLI policy are protected from creditors of the insurance company because they are segregated into separate accounts. These separate accounts are not part of the general assets of the insurance company.
– The assets are also protected from their own creditors, because of the asset protection laws in the jurisdictions where the PPLI companies are located. For example, the Bermuda Life Insurance Act of 1978, § 26(1), provides an unlimited exemption to the insured of both cash value and death benefit¹. Further protection can be offered with the policy being owned by a trust that has its own asset protection provisions.
– A PPLI policy actually offers three layers of asset protection: the fact that they are held in segregated accounts; laws that exempt life insurance from the claims of creditors; and the asset protection laws in the jurisdictions where the PPLI insurance companies are located¹.
– In addition, the PPLI policy inherently offers considerable tax benefits as well as asset protection. This would counter any argument that the transaction was a mere so-called fraudulent transfer to thwart creditors.
– The income and gains inside a PPLI policy are tax-deferred or tax-free, depending on the jurisdiction and the type of policy. This allows for tax-efficient accumulation and distribution of wealth.
– The policyholder can access the cash value of the policy through tax-free loans or withdrawals, subject to certain limitations.
– The death benefit of the policy is generally free of income and estate taxes, and can be paid to any beneficiary without probate or delays.
PPLI is one of the main elements of Expanded Worldwide Planning (EWP), which is a comprehensive approach to international tax planning and wealth management. EWP embodies six principles: privacy, asset protection, tax shield, succession planning, compliance simplifier, and trust substitute.
EWP Financial is one of the leading firms in providing PPLI and EWP solutions to clients worldwide. EWP Financial was founded by Michael Malloy, (CLU, TEP, RFC), a renowned expert in PPLI and EWP with over 40 years of experience in risk management and international tax planning. He has published two books on PPLI: The PPLI Papers and The Wit and Wisdom of Professor PPLI.
If you are interested in learning more about how PPLI and EWP can benefit you and your family, please contact EWP Financial today. We will be happy to answer your questions and provide you with a personalized proposal.
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