WHAT IS PRIVATE PLACEMENT LIFE INSURANCE (PPLI)?

Private Placement Life Insurance uses the power of compounding to grow wealth that can be tax-free, while allowing you to loan money to yourself that can also be tax-free.

PPLI is not for everyone. You must be a qualified purchaser—an investor in the highest marginal federal and state tax brackets—whose objectives are to minimize taxes, accumulate wealth, and/or transfer significant wealth to the next generation and beyond.

WHY PPLI?

Wealth accumulation and generational asset transfer requires thoughtful planning and creative solutions to maximize outcomes.

As the adage goes:

It’s not what you make,
but what you keep

This is even more important as federal, state, and investment income taxes place an ever-larger drag on investment performance.

If you’re seeking a way to grow your wealth free of taxes, with less investment complexity, consider PPLI.

Tax-Deferred Portfolio Growth

With PPLI, you can avoid tax drag on your investment growth. Not having to pay federal, state, and investment income taxes allows you to optimize the power of investment return compounding. This, combined with other trust-planning strategies, can provide significant wealth, generational asset transfer, and asset-protection advantages.

PPLI Is NOT Traditional Life Insurance

Unlike traditional life insurance, PPLI does not pay high upfront agent commissions, nor does it impose surrender penalties that can impinge on performance and reduce client flexibility.

It Is a Bespoke Portfolio That Grows Tax-Deferred

Your PPLI investment with Running Point Capital Advisors is a bespoke portfolio managed by Running Point Capital Advisors.
As your wealth accumulates, it grows tax-deferred.
You can take money out through loans to yourself that are tax-free.
Due to PPLI’s tax-deferral benefits, many PPLI investors elect to hold otherwise tax-inefficient strategies and borrow their own money, tax-free and K-1-free.
That means your PPLI portfolio can hold stocks, bonds, venture capital, private equity, credit funds, real estate, hedge funds, and specialty funds.
Or similarly, it can include strategies that generate substantial short- or long-term capital gains, dividends, or current income.
Structured properly, PPLI can provide a death-benefit strategy that can be passed on to multiple generations, free of estate taxes.

What Your Insurance Agent Isn’t Telling You

Traditional Life Insurance

No customization of investment portfolio

Off-the-shelf, closed-end investment platform

Commission-based

Surrender period and penalties may apply

...

Running Point PPLI

Bespoke portfolio management

Open-architecture investment platform

Fee-based advisor compensation

No surrender period or penalties

Asset protection (subject to jurisdiction selection)

“We manage your portfolio, and it can grow tax-free.”

Jim Schlager

Founding Partner, Running Point Capital Advisors

The taxes you don’t pay on your PPLI

Your Questions Answered

Is PPLI really tax-free?

Yes, your wealth accumulates without taxes. The death benefit is also free of income and estate taxes, and if structured properly would not be included in your taxable estate.

Is it life insurance or an investment tool?

It is both life insurance and a wealth management accumulation tool. Like traditional life insurance, it pays a death benefit. However, PPLI offers more diverse, bespoke investment options. The portfolio within Running Point’s PPLI is managed by our asset management team and tailored for you and your family’s goals, risk tolerances, and liquidity needs. That’s a clear differentiator versus traditional life insurance, where investments are one-size-fits-all. Traditional life insurance investments not only cannot be customized, they do not allow the portfolio to hold direct investments, real estate, private equity, hedge funds, private credit, or other nontraditional investments.

Why have I not heard of it before?

Private Placement Life Insurance has been around for decades, but does not pay commissions, so life insurance agents have no incentive to sell you PPLI. PPLI is a “When you do well, we do well,” fee-for-service insurance and wealth accumulation product. As for investment advisors, most lack the proper licensing and experience to structure and manage such a complex product.

Why doesn’t everyone buy PPLI?

It’s not for everyone. Investors must be qualified purchasers and have the means to invest a substantial amount of cash. (Qualified purchasers must have a minimum of $5 million of investable assets.)

Next Step

Let’s discuss the wealth management and estate

planning advantages of a PPLI for you and your family.

Disclaimer

IMPORTANT NOTES: The opinions expressed are those of Running Point Capital Advisors, LLC (Running Point) and are subject to change without notice. The opinions referenced are as of the date of publication, may be modified due to changes in the market or economic conditions, and may not necessarily come to pass. Forward-looking statements cannot be guaranteed. The foregoing presentation is provided for informational purposes only, and is not investment advice of Running Point Capital Advisors, LLC (Running Point) as PPLI will not be suitable for all investors. The presentation is based on facts believed by Running Point to be accurate as of the date of publication, but such facts cannot be guaranteed and may change. Any PPLI investment involves the risk of loss. Past performance does not guarantee future results. Running Point is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Running Point’s investment advisory services and fees and its affiliates’ employees’ insurance services and commissions can be found in its Form ADV Part 2A, which is available upon request or at https://adviserinfo.sec.gov/. Changes in tax or estate tax laws, as well as an investor’s individual situation, could make PPLI less favorable than other investment options for certain investors. Investors must consult with their individual tax and estate tax planning advisors about PPLI and nothing in this presentation is intended as tax or estate tax planning advice.