Q and A about PPLI

Frequently Asked Questions about Private Placement Life Insurance, (PPLI) and its Answers


What is PPLI?

Private Placement Life Insurance (“PPLI”) is a variable universal life insurance product designed for high net worth investors. It provides policy holders with sophisticated asset management choices. It combines the tax benefits of life insurance with the investment benefits of private banking.

Why are investors interested in PPLI?

Generally, the core motivation for acquiring a PPLI product is to establish a tax-free investment environment, at the lowest possible cost, in which an investor may designate a hedge fund or traditional money manager(s) to manage the assets paid into the insurance policy. The death benefit component of the policy usually is considered a secondary benefit.

What are the income tax advantages of life insurance?

The income tax benefits of life insurance include: (1) tax-free earnings (dividends, interest, and capital gain) on policy assets; (2) the ability to withdraw and to borrow assets from the policy cash value free of income tax (with proper structuring); and (3) the receipt of policy proceeds by the policy beneficiaries at the death of the insured on an income tax-free basis.

What are the main differences between PPLI and retail life insurance?

• The policy owner has broader flexibility with regard to the policy’s underlying investments. However, the policy owner cannot exercise direct control over the investment of the policy assets.

• Fees are much more competitive than retail insurance products. In most cases, there are low front-end loads on premium payments, and the annual charges against policy cash values are a small fraction of the annual tax cost associated with similar investments in a taxable environment.

How does PPLI interact with EWP?

PPLI and EWP can be used in combination to provide individuals with a comprehensive tax planning and investment strategy.

EWP is a tax planning strategy that takes into account a person’s worldwide assets, income, and taxes, to minimize their overall tax liability. When EWP is combined with PPLI, the policyholder can benefit from the tax-free growth of their investments within the PPLI policy, and also benefit from the tax planning strategies provided by EWP.

For example, a person living in a high tax country can use PPLI and EWP to structure their investments in a way that minimizes their overall tax liability. The investments within the PPLI policy can grow tax-free, and benefit further by being structured in accord with the six principles of EWP discussed in Wikipedia’s article on International Tax Planning.

Overall, the combination of PPLI and EWP provides individuals with a comprehensive and customizable solution for tax planning and investment management, which can be tailored to meet their specific needs and goals.

For more information contact us toll free worldwide +1 877 811 5846

Thank you.


by Michael Malloy, CLU TEP RFC.
CEO, Founder @EWP Financial

~ Your best source for PPLI and EWP

Michael Malloy-CLU-TEP











#PPLI #financialplanning #wealthmanagement

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