For affluent investors it is really about how much they walk away with, not necessarily how much they earn. A great performing investment can become very mediocre once taxes are taken into account. There are, however ways of mitigating the tax bite from a variety of different types of investments. One of the best-kept secrets in tax planning has been Private Placement Life Insurance, which makes it possible for investors to capture returns tax free.
A Private Placement Life Insurance (PPLI) is a form of classic life insurance policy, acting as a tax efficient legal structure for a broad range of bankable and non-bankable assets while securing influence and the preservation of discretion.
Private Placement Life Insurance is a variable life insurance policy that provides cash value appreciation based on a segregated investment account and a life insurance benefit. It is designed to maximize savings and minimize the taxes paid on death. What is also very important about PPLI is that it can be a very useful tool for more complicated tax planning. With proper planning, the cash value appreciation and insurance coverage can also escape gift and estate tax. It can also be structured to provide first-class creditor protection.
Some of the benefits but limited to the following include Privacy, Asset Protection, Tax Optimization, Estate Planning and Liquidity.
Overall, Private Placement Life Insurance is income tax efficient, while providing the owner with tax-free access to the policy cash values. Because of the tax benefits, the very wealthy, including family offices are increasingly embracing Private Placement Life Insurance.
For more information about how we can help you in your wealth management feel free to contact us.
