A closer look Private Placement Life Insurance: A Potential Tool for Tax Efficiency and Wealth Transfer

Trevor J. Hamilton

Apr 30, 2019

In Brief

  • Because of its potentially significant tax advantages, private placement life insurance (PPLI) has gained increasing attention and popularity among investors, institutions, insurance brokers, and alternative investment managers.
  • PPLI is most commonly used to improve the performance of tax-inefficient investments.
  • PPLI may also be a solution for individuals and families of significant wealth seeking to transfer wealth as tax efficiently as possible.
  • PPLI may help amplify some of the advantages of lifetime gifts by shielding assets from estate taxes while at the same time offering a death benefit that acts as a “de facto step-up in basis” to mitigate potential future capital gains taxes when the assets are sold.
  • At the same time, PPLI has certain costs and other potential drawbacks, and is not an automatic choice. The potential benefits must be carefully weighed for each individual client and situation.

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Trevor Hamilton
Senior Life Insurance Advisor
Trevor is responsible for leading the firm’s life insurance advisory practice, as well as the oversight of trust-owned policies.