PPLI
Private placement life insurance
A privately offered, investment led life insurance policy for wealthy investors. In the United States it is sold only to accredited investors and qualified purchasers.
Private Placement Life Insurance
Since 1999
Private placement life insurance · PPLI
The quiet structure behind many family fortunes.
PPLI lets a family hold its investments, from hedge funds to private credit, inside a life insurance policy. In many countries the growth is not taxed while it stays there, and what passes to the next generation arrives as a life insurance benefit. Whether that holds for you depends on where you live. Tell us what you are trying to understand about PPLI and which countries are involved. The team will review your request before confirming what research it can provide.
- Who it is for
- Families investing from a few million dollars of premium upward, and the trusts and family offices that serve them.
- What it holds
- Insurance dedicated funds and managed accounts, run by an independent manager.
- Who owns it
- Often a trust, so the policy sits outside the estate.
- Where it is written
- US states, Bermuda, Luxembourg, Liechtenstein, Ireland and a few others.
Private briefingNo charge · No obligation
Start with your question
A short description helps us understand your request. Your asset range is optional, and no policy documents are required at this stage.
Since 1999ppli.com, online for more than a quarter of a century
8 languagesof published research on private placement life insurance
16 issuerstracked in the PPLI.com carrier register
No productsPPLI.com does not issue or sell policies
What PPLI is, in plain words
A life insurance policy that is really an investment account.
Most life insurance is sold to protect a family against an early death. Private placement life insurance is used for something else. The insurance is kept to the legal minimum, and almost all of the premium goes into an investment portfolio held inside the policy.
Because the portfolio belongs to a life insurance contract, many tax systems treat it as insurance rather than as an ordinary investment account. Income and gains that would be taxed every year can build up untaxed. When the insured person dies, the policy pays out, and the heirs receive the money as life insurance proceeds.
The words private placement mean the policy is not sold to the public. It is offered privately to investors who meet wealth thresholds, and it is built for each family: the premium, the manager, the investments and the owner.
An example. At a 7% return and a 40% tax rate, $25 million held directly for 25 years ends near $70 million. Inside a policy, after its costs, the same portfolio ends near $105 million. Same manager, same investments. A different place to hold them.
The vocabulary
Six terms you will meet, and what each one means.
Advisers, banks and insurers do not always use the same words. These are the ones that come up most, with the plain meaning behind each.
PPVL
Private placement variable life
The American name for the same thing. “Variable” means the policy value moves with the investments inside it.
PPVA
Private placement variable annuity
The annuity cousin of PPLI. Growth is deferred, but there is no life insurance benefit, so gains are taxed when paid out. Often used by trusts and charities.
Insurance dedicated fund
IDF
A hedge fund or private credit fund open only to insurance policies. It is built to meet the diversification rules that keep a policy’s tax treatment intact.
Life insurance wrapper
Portfolio bond, offshore bond
The European and British way of describing an investment held inside a policy. In the UK it is usually called a portfolio bond, and is often held in trust.
Trust-owned policy
ILIT, dynasty trust, SLAT
A policy owned by a trust rather than by a person. Done correctly, the proceeds can pass to later generations outside the taxable estate.
Who looks at PPLI
Families usually write to us at one of these moments.
No two cases are alike. These are the situations we see most often, from families and from the lawyers, private bankers and family offices who act for them.
- Before a liquidity eventA company sale or listing is ahead, and the proceeds need a home that does not hand a share of every year’s growth to the tax authority.
- Hedge funds and private creditStrategies where most of the return is taxed as ordinary income every year. This is where tax drag is largest and where PPLI was first used.
- A trust that needs an assetA dynasty, grantor or offshore trust holding investments that are taxed each year. A policy owned by the trust can change that.
- A family office reviewing structuresConsolidating several generations and jurisdictions, and looking for one vehicle that reports cleanly and passes on cleanly.
- A family across bordersA move to or from the UK, the US, Europe or the Gulf, children studying abroad, or a US person somewhere in the family.
- A proposal already on the tableAn illustration from an insurer or a bank, and a wish to understand every line before signing.
The arithmetic
Same investments. Same return. A different amount left at the end.
Inside a policy that qualifies, growth is not taxed each year. The effect is small in year one and very large by year twenty five. Move the figures to your own.
Assumptions
Held directly, taxed yearly
Inside a policy, after its costs
Difference
Illustration, not a projection of any policy. Direct: amount × (1 + return × (1 − tax))years. Policy: amount × (1 − upfront) × (1 + return − annual cost)years. Assumes the whole return would be taxed each year if held directly and that the policy value is paid out as a death benefit. Surrenders, loans, local law and your actual portfolio change the result.
An honest account
What PPLI can do, and what it cannot.
Where it can help
- Tax drag. Income and gains inside the policy are generally not taxed while they stay there, which matters most for high turnover and income heavy strategies.
- Passing wealth on. Proceeds are paid as a life insurance benefit and, with the right owner, can sit outside the estate.
- Protection. In several jurisdictions policy assets are held apart from the insurer’s own creditors, and enjoy protection under local law.
- One clean holding. Many managers and asset classes, reported as a single policy.
Where it often does not
- Short horizons. Upfront charges need years of untaxed growth to pay back.
- Control. You cannot pick the individual investments yourself. The rules on investor control are strict.
- Some countries. Where investment income is already lightly taxed, or where policies are taxed like ordinary accounts, the case is weak.
- Money you need soon. Withdrawals and loans have rules and, done carelessly, tax costs.
Where policies are written
The same idea, under six different laws.
Where a policy is issued affects how it is taxed, how the assets are protected and who can own it. Mention the countries and the issue you want the research team to review.
United States
Domestic insurers write PPLI for American families. States such as Delaware and South Dakota are also known for their trust laws.
Bermuda
A long established centre for policies. Some Bermuda insurers elect to be taxed as US companies so that they can serve American clients.
Luxembourg
Known for its “triangle of security”: policy assets sit with an independent custodian bank and rank ahead of other creditors.
Liechtenstein
Policies under Liechtenstein law with strong policyholder protection, widely used by families in continental Europe.
Ireland
Insurers that sell unit linked policies across the European Union, including portfolio bonds held by UK residents.
Cayman Islands
Another centre for private placement policies, often alongside funds that are domiciled there.
Your request
Questions you can bring to the research team
Use your request to identify the issue you want to explore. Any further research scope needs to be confirmed after the team has reviewed it.
- Countries involvedIdentify which jurisdictions are relevant to your question.
- AssumptionsPoint out an assumption or illustration you want to understand.
- Costs and restrictionsAsk about a charge, withdrawal restriction or missing cost item.
- Provider informationIdentify the issuer information or documents you are trying to compare.
- Questions for your advisersDescribe the issue you want to discuss with your own licensed advisers.
A note from the publisher
Most people who reach us already know the term. What they rarely have is a straight account of what a policy would do for them in particular, in their own currency and under their own tax law.
PPLI.com has been online since 1999. Since I took it over in 2020 it has been devoted to this subject, and it is now a research library in eight languages, read by families and by the professionals who advise them. The briefing is the same work, done for one family at a time.
Sometimes our answer is that PPLI is not for you. The costs are real, the rules on control and diversification are strict, and in some countries the tax case is weak. You should hear that before you commit capital, not after.
Eldar Edmond Grady
Chief Executive, PPLI.comQuestions
What families ask before they write to us.
If your question is not here, put it in your request.
What happens after I submit?
Your request is saved for review by the PPLI.com team. We may ask for clarification before confirming what research we can provide.
Is this personal advice?
No. PPLI.com publishes research and educational material. We do not provide legal, tax, investment or insurance advice.
Do I need a proposal or an asset figure to ask?
No. You can start with a general question. Your asset range is optional, and you do not need to upload policy documents.
Is there a fee?
No. There is no charge for the briefing and no obligation of any kind afterwards.
How much do you need to invest for PPLI to make sense?
Policies are usually discussed from a few million dollars of premium, and the economics improve with size. Below that, the fixed costs tend to outweigh the tax benefit.
Is PPLI legal, or is it a loophole?
It is a long established form of life insurance, recognised in the tax law of the United States and many other countries. It works only when the rules are followed: the policy must qualify as insurance, the investments must be diversified, and the owner must not direct them. Regulators pay attention to structures that cut corners.
Can a trust own the policy?
Yes, and it often does. Irrevocable, dynasty, grantor and offshore trusts all hold policies. Which one fits depends on your estate planning and on the country where the trust and the family are resident.
What is the difference between PPLI and a PPVA?
Both hold investments privately. A PPLI policy includes life insurance, so what passes to heirs is generally received as a death benefit. A PPVA defers tax on growth but has no death benefit, so gains are taxed when paid out.
I live in the UK. Does this apply to me?
British residents usually meet the idea as a portfolio bond or offshore bond, which has its own tax rules on withdrawals and on gains. Mention the countries and the issue you want the research team to review.
Can I ask on behalf of a client?
Yes. Describe the issue without including your client’s name or identifying financial details.
Does submitting this form book a consultation?
No. It sends a research request. Any further scope or engagement needs to be agreed separately.
Private briefing
What would you like to understand about PPLI?
Send my research request Send a short research request, or email info@ppli.com.