Did You Know This About PPLI & EWP? – Episode 1 – The Frozen Cash Value Policy Design

New Video Series by Michael Malloy CLU TEP RFC

Did You Know This About Private Placement Life Insurance and Expanded Worldwide Planning?

The Frozen Cash Value Policy Design

Fundamentals of PPLI and EWP

Welcome. Being a winner is like standing tall on top of a mountain, like the woman here. We invite you to be a winner in our new series entitled: Did you know this about PPLI and EWP? What do you have to do? You win by submitting the best answer to this question:

For U.S. taxpayers, what section of the tax code pertains to the frozen cash value policy design, and how does the language of this code section sanction this design?

What will you win? Alas, not a villa on Italy’s Amalfi coast, but you will receive a PPLI/EWP Token which can be redeemed for one of our unique NFT images.

Please submit your answers to info@ewp-financial.com. Best of luck on answering our questions. Thank you for listening.


Since we don’t wish to speak about our contest topic until you have had a chance to submit answers, this week we will cover some basic Q&A about PPLI. We look forward to receiving your answers after learning about the contest from our very short video explanation. Good luck to all!

What is Private Placement Life Insurance?

Private Placement Life Insurance (PPLI) is a variable universal life insurance policy designed for high net worth investors. Foreign insurance companies offer the most robust options for sophisticated asset structuring, and are able to incorporate almost any asset in their policy designs.

Why are investors interested in PPLI?

Generally, the core motivation for acquiring a PPLI policy is to establish a tax-free investment environment, at the lowest possible cost, in which an investor may designate a money manager(s) to manage the assets placed into the insurance policy.

What are the income tax advantages of life insurance?

The income tax benefits of life insurance include: (1) tax-free earnings (dividends, interest, and capital gain) on policy assets; (2) the ability to withdraw and to borrow assets from the policy cash value free of income tax (with proper structuring); and (3) the receipt of policy proceeds by the policy beneficiaries at the death of the insured on an income tax-free basis.

What are the main differences between PPLI and retail life insurance?

The policy owner has broader flexibility with regard to the policy’s underlying investments, with proper structuring almost any asset classes can be included in the policy design. However, the policy owner cannot exercise direct control over the investment of the policy assets.

Policy purchasers must meet “qualified purchaser” and accredited investor” guidelines under SEC rules.

Fees are minimal compared to retail insurance products. In most cases there are low front-end loads on premium payments, and the annual charges against policy cash values are a small fraction of the annual tax cost associated with similar investments in a taxable environment.

What are the fees typically associated with PPLI?

There are three primary insurance-related fees associated with PPLI policies: the premium load, the “mortality and expense” charge, and the cost of insurance charge. The premium load will vary, but should typically be 1% or less of premium, and the combination of the mortality and expense charge and cost of insurance charge should average, over the life of the contract, less than 1% per year. Asset management fees will depend on the asset manager(s) selected to manage the insurance portfolio.

What will the policy beneficiaries receive when the insured dies?

The income tax-free death benefit consists of the cash value of the policy (the premiums paid, plus growth, less account charges) plus the “risk” or pure insurance element. The insurance element generally will be minimized to the extent possible in the design process, and its amount will be determined with reference to U.S. tax rules. Insurance risk coverage in the offshore market is provided by the same reinsurance companies that reinsure the domestic life insurance market.

Where is the investment account of the policy and is it safe?

The separate account(s) of the policy will be custodied in accordance with the asset manager’s normal custodial arrangement. The separate account of the policy is protected by law in the state or foreign jurisdiction where the insurance carrier is located from the creditors of the insurance carrier. The policy is also protected against claims of the policy owner’s creditors with proper structuring.

by Michael Malloy, CLU TEP RFC.
CEO, Founder @EWP Financial

Michael Malloy-CLU-TEP















Expanded Worldwide Planning (EWP) – Review

The new paradigm for international structuring – Updated

Give Your Clients Greater Control Within a Simpler Structure Using Expanded Worldwide Planning (EWP)

Have you heard of Expanded Worldwide Planning (EWP) or International Tax Planning?

You have heard of FATCA, CRS, and BEPS – well, within these confines, why not embrace greater freedom: EWP allows you to simplify your existing structures and minimize your reporting obligations under FATCA and CRS. The total fee is approximately 1% of the client’s assets inside the structure.

At Advanced Financial Solutions Inc., we are finding that clients are requesting simpler structures that offer full transparency. This white paper introduces you to one that gives advisors multiple creative opportunities to achieve this aim.

In its core, an EWP is a properly structured Private Placement Life Insurance (PPLI) policy
in a jurisdiction appropriate to the client’s other planning needs. The other elements in the
EWP structure differ depending on the individual client situation. Advisors must factor in the client’s nationality, country of origin, country(s) of domicile, the insurance regulations of all the jurisdictions involved, the tax reporting obligations of all the entities in the structure, and the planning aims of the client. Our chart below outlines some of the possibilities for planning using EWP.

Under the segregated account legislation of the PPLI policy jurisdictions listed in our chart,
the insurance company becomes the beneficial owner of the assets inside the policy.

The reporting obligations under FATCA and CRS differ for each of the policy jurisdictions on our  chart. The goal of EWP is to give clients full compliance with all existing tax regulations while still retaining the utmost possible privacy for them.

The old offshore world is in flux and in the process of redefining itself. This creates new
possibilities for planning that did not previously exist. Whatever the nationality of your client and their very particular needs, we can supply you with compliant solutions. Each of the PPLI policy jurisdictions listed in our chart can provide vastly enhanced planning possibilities in  this open architecture environment. The trust, or other policy holder entity, can be domiciled  anywhere in the world, and the assets inside the policy can also be located anywhere in the world. Please reflect on these new possibilities. We welcome your inquiries, questions, and  comments.

Download full PDF document with graphics and notes


by Michael Malloy CLU TEP RFC, @ EWP Financial

Michael Malloy-CLU-TEP-RFC