Private placement Life Insurance
What is it?
PPLI is a form of Variable Universal Life insurance that offers the flexibility to invest in a range of investment options. It is a form of insurance wrapper that allows for the investments to be enveloped in a legal structure that offers various wealth planning benefits.
Benefits
- Tax - It depends on the policy holder's and beneficiaries tax jurisdiction(s) they are subject to, but there are considerable tax benefits to be taken advantage of. The investment gains are accrued tax-free within the policy, which leads to a considerably different investment outcome. Also, there are tax benefits to withdrawals and inheritance planning. The tax benefits are one of the major draws of this scheme.
- Asset Protection - Due to the way the policy is legally structured, the assets within are no longer at risk of bankruptcy proceedings or other forms of claims or seizure.
- Privacy - The investments are technically made in the name of the insurer, therefore, there are greater freedoms in investment choice that are otherwise restricted by a number of factors. Furthermore, there is far greater confidentiality due to less or no reporting requirements. The policy holder, in many case, remains anonymous and invisible to the public eye.
- Trusts - These policies can be very effective when used in conjunction with trust structures. Many jurisdictions have anti-avoidance rules seeking to look through trusts to tax investments on an annual basis and sometimes at punitive rates. Combining a trust with a PPLI combines the estate-planning benefits with tax neutrality, simplified tax reporting and tax-efficient exit strategies.
Structure
The client is the policy holder, while the insurance provider is the legal owner of the assets, and JS Wealth is responsible for the management of the investment assets, both parties working for the policy holder(s) and the the policy's beneficiaries.