The more wealth a family acquires, the more tools they need to preserve those assets for future generations and protect them from the long arms of tax agencies in the U.S. and abroad. One such tool earning the attention of family offices and ultra-high-net-worth individuals across the world is private placement life insurance (PPLI).
In the simplest terms, a PPLI policy is a customizable investment portfolio structured in a tax-efficient variable life insurance policy that features the following benefits:
Essentially, the insurance carrier holds the PPLI policy separate from its general risk pool, where it is managed by independent investment solutions rather than insurance companies. Policyholders may select from a broad range of investable options and asset classes offered by the insurer and tailored to their specific needs and objectives. This may include investments in mutual funds, index funds, hedge funds, credit and direct lending funds, real estate and private equity.
Families with substantial investable assets should consider PPLI as a sound strategy for mitigating tax liabilities during life, after death and potentially for future generations to come. This is especially true today, given that the current estate tax exemption of $11.7 million for individuals (or $22.4 million for married couples filing joint tax return) is set to sunset in 2026 and return to its 2017 level of $5 million. Moreover, with the new presidential administration, which campaigned on tax increases, there is a very real risk that this very generous exemption will be reduced even sooner.
About the Author: Eric P. Zeitlin is CEO and managing director of Provenance Wealth Advisors (PWA), an Independent Registered Investment Advisor affiliated with Berkowitz Pollack Brant Advisors + CPAs, and a registered representative with Raymond James Financial Services. For more information, call (954) 712-8888 or email info@provwealth.com.
Provenance Wealth Advisors, 515 E. Las Olas Blvd., Ft. Lauderdale, FL 33301 (954) 712-8888.
Eric P. Zeitlin is a registered representative of and offers securities through Raymond James Financial Services, Inc., Member FINRA/SIPC.
Raymond James is not affiliated with and does not endorse the opinions or services of Berkowitz Pollack Brant Advisors + CPAs. PWA is not a registered broker/dealer and is independent of Raymond James Financial Services. Investment Advisory Services offered through Raymond James Financial Services Advisors, Inc., and Provenance Wealth Advisors.
This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of the advisors of PWA and not necessarily those of Raymond James. The information contained in this report does not purport to be a complete description of the developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Investments mentioned may not be suitable for all investors. You should discuss any tax or legal matters with the appropriate professional. Prior to making an investment decision, please consult with your financial advisor about your individual situation.
Private Placement Life Insurance policies are unregistered securities products and are not subject to the same regulatory requirements as registered securities products. As such, Private Placement products should only be presented to accredited investors or qualified purchasers as described by the Securities Act of 1933. The information presented here is not an offer to purchase or the solicitation of an offer to purchase an investment product.
Variable life insurance is long-term investment and may not be suitable for all investors. Investments in variable products are subject to fluctuating values of the underlying investment options and entail risk, including the possible loss of principal. Product guarantees, including the death benefit, are subject to the claims-paying ability of the issuing insurance company.
Alternative investments are available only to those who meet specific suitability requirements, including minimum net worth tests. Please review any offering materials carefully and consult with your tax advisor or accountant prior to investing. There are special risks involved with alternative investments, including investment strategies, and different regulatory and reporting requirements. There is no assurance that any investment will meet its investment objectives or that substantial losses will be avoided. Alternative Investments involve substantial risks that may be greater than those associated with traditional investments and may be offered only to clients who meet specific suitability requirements, including minimum net worth tests. These risks include, but are not limited to, limited or no liquidity, tax considerations, incentive fee structures, speculative investment strategies, and different regulatory and reporting requirements.
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