The basics
What is Private Placement Life Insurance?
PPLI is a privately negotiated variable universal life insurance contract, offered only to Accredited Investors and Qualified Purchasers, whose separate account can hold institutional strategies unavailable inside retail insurance products.
A structural definition
PPLI is a life insurance contract under IRC §7702 whose cash value is invested through a segregated separate account rather than the carrier's general account. It is offered as a private securities placement to investors who qualify as both Accredited Investors and, in most structures, Qualified Purchasers.
Why the wrapper matters
Because the contract satisfies §7702, investment income and gains accrue tax-deferred inside the policy. The death benefit is generally paid income-tax-free under §101(a). For UHNW investors holding tax-inefficient strategies over long horizons, the wrapper can eliminate the annual tax drag that compounds against direct ownership.
Where it fits
PPLI is used by family offices, UHNW individuals, and trusts to hold hedge funds, private credit, private equity, and other alternative strategies inside a tax-efficient structure. Minimum premiums typically start in the low seven figures for the economics to make sense.
Policy structure
How a PPLI policy is assembled.
Premium
Contributed by the insured
PPLI Policy
Institutional life insurance contract
Separate Account
Insurance Dedicated Fund (IDF)
Tax-Advantaged Growth
Deferred inside the wrapper
Living benefit
Tax-deferred growth
At death
Income-tax-free benefit
Illustrative. PPLI is a private variable universal life insurance contract offered only to Accredited Investors and Qualified Purchasers, and must comply with IRC §7702, §817(h), and the investor-control doctrine.
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.
Next step
Want a guided walkthrough?
A PPLI-experienced advisor can review carrier, jurisdiction, policy design, and IDF fit for your family office or clients.
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.