Sophisticated Structures for the Modern Investor
Combine institutional investment access with powerful tax planning. Purpose-built for accredited investors and qualified purchasers.
Concerned about taxes on short-term capital gains and ordinary income from active trading? High net worth investing requires both the right assets and the right structure. Private placement life insurance (PPLI) and private placement variable annuities (PPVAs) are purpose-built vehicles designed to enhance after-tax returns for accredited investors and qualified purchasers.
Why choose PPLI or PPVAs?
1. Institutional access
PPLI and PPVAs let investors access exclusive investment strategies, such as hedge funds, private equity and private credit, through special insurance funds. These can include top hedge fund platforms, such as Millennium Management, which are typically closed to new investors but may be available through approved platforms.
2. Tax advantages
Tax-deferred growth is a key advantage of PPLI and PPVAs. PPLI may offer income tax-efficient withdrawals and loans, while PPVA distributions are generally taxed as ordinary income.
3. Design flexibility
Open‑architecture platforms, negotiated policy charges, trust ownership options and multi-jurisdiction carriers allow you to align your policy with your specific estate planning, asset protection and investment objectives.
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Why choose PPLI or PPVAs?
- PPLI (Life Insurance): Investment growth accrues without current income taxation. If held until death, the death benefit (including investment gains) generally passes to beneficiaries income-tax-free.
- PPVA (Annuity): Investment growth is tax-deferred. You only pay taxes when you withdraw the gains, allowing your principal to compound faster over time without annual tax friction.
At their core, PPLI and PPVAs are investment accounts wrapped inside an insurance structure. This changes the tax character of the investment income generated within. These are highly customizable tools that feature negotiated policy charges and trust ownership options, allowing integration into multi-generational estate plans.
Who is eligible?
Due to the sophisticated nature of these investments, regulatory requirements restrict access to investors who meet specific financial thresholds.
You may qualify if you are:
- An accredited investor with a net worth over $1 million or an annual income over $200,000 ($300,000 joint).
- A qualified purchaser with over $5 million in investments or an entity with over $25 million in investments.
Key considerations
We believe in full transparency. Although the benefits are significant, these structures are complex and require careful implementation.
- These structures involve insurance charges (certificate of insurance), mortality and expense risk fees and potential state premium taxes.
- PPLI and PPVAs are long-term vehicles. Surrendering a policy early could result in surrender charges and tax penalties.
- To maintain tax-advantaged status, these accounts must adhere to investor control and diversification You cannot directly manage the underlying assets; an independent investment manager must handle day-to-day trading decisions.
Ready to upgrade your tax strategy?
Discover if a private placement structure is the right fit for your portfolio.