Private Placement Life Insurance (PPLI) is a wealth-planning solution for wealthy families and high net worth\u00a0individuals. In essence, PPLI solutions offers a number of advantages over other holding structures (e.g. trusts, foundations, companies), as they leverage the power of a life insurance policy to provide privileged privacy, asset protection, tax and estate planning benefits.\u00a0PPLIs are very versatile and can hold both financial and non-financial assets (e.g. operating companies, real estate, etc).<\/p>\n
Why you may consider PPLI rather than using a different holding structure?<\/p>\n
The main benefits are as follows:<\/p>\n
P – PRIVACY<\/strong><\/p>\n The insurance company becomes the\u00a0legal\u00a0beneficial owner of the assets.\u00a0As investments are made in the name of the insurer there are no restrictions due to citizenship, providing increased freedom of choice. This also provides increased confidentiality due to insurance secrecy laws, with often lower or no reporting obligations.<\/p>\n A – ASSET PROTECTION<\/strong><\/p>\n When\u00a0correctly\u00a0structured, the policy\u00a0may not be\u00a0seized or included in\u00a0bankruptcy\u00a0proceedings or other creditor claims. The policy is\u00a0normally held in a segregated account by the insurance company, providing an additional layer of protection.<\/p>\n T – TAX OPTIMIZATION<\/strong><\/p>\n Depending on the tax domicile of the policyholder\u00a0and the beneficiaries,\u00a0the policy can be set up so it can grow tax-free or tax-deferred. In addition, reporting obligations are generally significantly\u00a0simplified.<\/p>\n E – ESTATE PLANNING<\/strong><\/p>\n As the policy is not considered to be part of the policyholder\u2019s estate and they have\u00a0a free choice of beneficiaries, assets can be\u00a0passed on\u00a0efficiently to the next generation or other parties, avoiding probate. Should the policyholder pass away while the policy is in force, the insurance company will pay according to their wishes within thirty days.<\/p>\n C – CASH \/ LIQUIDITY<\/strong><\/p>\n The policy can be surrendered or\u00a0used as collateral for a loan at any time.\u00a0If necessary, a high\u00a0level of\u00a0death coverage can be\u00a0included if a known estate or inheritance tax liability is likely to affect the next generation.<\/p>\n