Understanding Private Placement Life InsuranceUnderstanding Private Placement Life Insurance

Private placement life insurance (PPLI) is life insurance that has unique features not available for sale to the general public. PPLI policies are designed to appeal to high-net-worth individuals interested in funding insurance with a large, up-front premium payment to achieve high investment return on the amount transferred into the policy.

Let’s review how PPLI, specifically “on-shore” PPLI policies (that is, policies offered for sale and purchase in the United States through U.S. carriers), works and the planning opportunities and pitfalls that pertain to such products.

Popularity of PPLI

PPLI is an individually tailored variable universal life (VUL) insurance policy. Some of the reasons PPLI has become more popular in recent years inclu...