Definition
IRC §817(h)
The diversification requirement for variable insurance separate accounts.
Full definition
Section 817(h) requires the investments backing a variable insurance contract to be adequately diversified. The safe-harbor test: no single investment more than 55% of the account, no two more than 70%, no three more than 80%, no four more than 90%. Failing §817(h) collapses the policy's tax treatment — every PPLI separate account and IDF is engineered around it.
Related terms
Insurance Dedicated Fund (IDF)
A pooled fund created specifically to sit inside variable insurance contracts and satisfy §817(h) diversification.
Investor Control Doctrine
The IRS doctrine that treats the policy owner as tax owner of separate-account assets when they exercise too much investment discretion.
PPLI (Private Placement Life Insurance)
A privately negotiated variable universal life insurance contract offered only to Accredited Investors and Qualified Purchasers.
Availability, tax treatment, and policy design depend on jurisdiction, carrier, investor qualification, and applicable law. simpleppli.com provides general educational information only — not tax, legal, insurance, or investment advice. Consult qualified tax counsel, insurance counsel, and licensed insurance professionals before implementing any PPLI structure.