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Taxable Investment vs. PPLI

Private Placement Insurance allows qualified investors the ability to have their investments grow in a tax-free environment, thus eliminating tax drag and increasing their returns. Most policies have low front-end loads and annual policy charges are a fraction of the tax costs associated with the same investments in a taxable environment. A general rule is that the total insurance fees are less than 1-1.25% of the cash value over the life of the investment. Looking at it from an investors perspective, a 10% return in a Private Placement Life Insurance Contract will yield approximately 9% net return versus a 6.5% return in a taxable environment. Remember, what you “keep” is more important than what you “earn!”


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Notes: 1. Assumes a 7.00% return net of investment management fees in the PPLI separate account. 2 Assumes a hypothetical combined state and federal income tax rate on taxable earnings of 40%. 3. The policy is designed as a non-Modified Endowment Contract (non-MEC) under current tax law. 4. Under current tax law, if the policy is fully surrendered, all investment gains in excess of the policy owner's basis are taxed to the policy owner as ordinary income in the year the policy is fully surrendered. Withdrawals or loans are tax-free to the policy owner. 5. Assumes federal DAC taxes are withdrawn from each premium deposit. 6. These calculations make assumptions as to future investment returns, mortality costs, and administrative expenses that are not guaranteed. Actual results may be higher or lower. The contents of this report are provided strictly for informational purposes. It does not constitute an offer by Copperstone Partners or any other party to you or to any other person to acquire a life insurance policy.