The Ultimate Wealth Preservation Strategy for High-Net-Worth Investors

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Unlike regular retail life insurance policies that use a fixed list of mutual fund subaccounts, PPLI is a flexible tax vehicle based on variable universal life insurance policies. It provides qualified investors with a facility to include various types of alternative assets in the separate account of an insurer. Such assets generally comprise hedge funds, private equity, private debt, real property, and active portfolios, which could generate substantial annual income and capital gains taxes in taxable accounts.
When investors store tax-inefficient asset types within a PPLI framework, they can greatly increase long-term compound growth prospects over time. At the time of their demise, the policy cash value and death benefit will directly go to the beneficiaries without being taxed. When used in conjunction with an irrevocable life insurance trust, private life insurance can also save assets from federal estate taxes.
Not only has it considerable tax benefits, but PPLI also gives significant asset protection and simple financial management for rich policyholders. When it comes to assets of the policyholders, the legal title is held by the insurance company’s own account unlike individuals’ ownership. As a result, the assets are mostly secured from lawsuits, creditors, and other legal obligations under the law. The policyholders do not have to solve the complication of filing complex reports since all the operations and profits take place indirectly through the policy. Even though the set up of a PPLI policy is quite complex and requires a number of legal, financial and tax consultants, it is still a perfect solution.