Private Placement
Life Insurance

Need special protection from threats to assets?

WHAT IS PPLI?

Assets can be protected against a range of threats. Such assets can be both liquid and fixed, and include:

  • stocks
  • structured notes
  • funds (mutual, hedge & ETFs)
  • companies' shares
  • commercial and residential real estate
  • vehicles, boats, airplanes
  • art collections

Assets are transfered to the insurer in exchange for an insurance policy with the same value. However, after death, the original assets are transferred to the beneficiaries.

PERSONS INVOLVED

Policy holder

The policy holder is the owner of the contract and controls the policy. He has the right to:

  • select the investment strategy;
  • appoint the beneficiaries;
  • surrender the policy; and
  • make changes to the policy.

The policy holder can be a private individual, a company, or have a legal structure like a trust or foundation.

Person insured

The term of the policy is linked to this person’s life. When the insured person dies, the contract normally comes to an end. The insured person must be a private individual. However, it is possible to have two people insured (joint-insured).

Beneficiaries

They receive the assets after the death of the insured person. The beneficiaries can be one or several private individuals, or a company, or a legal structure like a trust or foundation.

Arbiter

This is a third party (private individual or company) who is granted specific rights. Typically, an attorney or a trustee would act as the arbiter in a policy.

THE BENEFITS

Once the assets have been transfered to the insurer, the assets will be protected by the insurance policy.

Increased freedom with respect to investments, which are made in the name of the insurer.

Insurance secrecy laws ensure confidentiality. Often there is a lower reporting obligation because of tax privileged growth.

Assets are separated from the ordinary estate e.g. wife and children:

  • so free choice of beneficiaries e.g. business partners;
  • no certificate of distribution or will is needed; and
  • direct payout at death within 30 days.

Tax benefits. Depending on the tax domiciles of the policy holder and the beneficiaries, a policy can be tailored to grow tax-free or tax-deferred. (Please ask us for specific country information.)

Can be combined with legal structures like trusts, foundations, companies or funds.

WHAT IS THE CORRECT JURISDICTION?

A different jurisdiction to the insured person's domicile or nationality should be chosen.

CRITERIA FOR JURISDICTION SELECTION:

  • Political and economic stability.
  • Stable and sophisticated legal system to ensure asset protection, insurance secrecy etc.
  • First-class institutions.

EXAMPLES OF JURISDICTIONS INCLUDE:

Bermuda, Liechtenstein, Luxembourg, Ireland, Isle of Man, Singapore, Switzerland, Cayman Islands and USA.

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