I. PRIVATE PLACEMENT INSURANCE INTRODUCTION

Private Placement Insurance (PPI) is a broad category which consists of both Private Placement Life Insurance (PPLI) and Private Placement Variable Annuities (PPVA). These contracts have many similarities to their retail counterparts of Variable Universal Life (VUL) and Variable Annuities (VA), but there are also some key differences. Retail variable insurance products are registered with the U.S. Securities and Exchange Commission (SEC) and are regulated by the individual states. These contracts allow investors to pick from a menu of registered funds for potential growth of dollars held in a separate account from the insurance company’s general account. Retail policies may offer additional riders and features not found on PPI policies, which tend to be fundamentally basic. However, PPI policies tend to be institutionally priced and efficient from a fee perspective, while also not having “surrender periods” in which the insurance company assesses a fee for canceling the policy during the initial years of the contract. PPLI and retail VUL policies both follow the same definitions of life insurance and have a flexible premium and death benefit structure.[1]

II. INVESTMENT ALLOCATION OPTIONS

One of the key differences between retail policies and PPI policies concerns the underlying investment allocation options. Retail policies are exclusively invested within a menu of variable insurance trust funds (VIT). VITs are registered under the Investment Company Act of 1940 (’40 Act). They are priced daily and provide daily liquidity. PPI policies provide VIT options but also allow investors to invest in unregistered insurance dedicated funds (IDFs). IDFs may include alternative asset classes such as hedge funds, private equity, private credit, real estate, etc. In addition to IDFs, PPI policies may also allow for investments within an insurance dedicated separately managed account (SMA). IDFs are exclusively offered by insurance companies and do not comingle dollars from other taxable accounts.[2]  It is important to understand the rules governing investments within PPI policies, notably the requirements concerning structure, diversification, and investor control. An IDF must be a separate legal entity attached to, but distinct from, the insurance company’s general investment account. Diversification requirements apply to both SMAs and IDFs and provide that no single investment may represent 55% of the assets, no two investments may represent 70% of the assets, no three investments may represent 80% of the assets, and no four investments may represent 90% of the assets.[3] The investor control doctrine, which also applies to both SMAs and IDFs, provides that the fund or account must be managed on a discretionary basis and no policy owner can directly or indirectly influence the manager’s investment decisions.  If the policy owner at any point violates the investor control doctrine, the PPI policy may lose its tax-preferred status. The policy owner’s influence is typically limited to selecting a manager or fund from a pool that has been pre-approved and evaluated by the insurance company.

III. REQUIREMENTS FOR ELIGIBILITY

While retail policies are available to the general public, private placement insurance policies are only available to those who meet the SEC’s rules defining a qualified purchaser (QP) and accredited investor (AI). QP and AI requirements may differ depending on whether the investor is an individual or an entity. Under Section 2(a)(51) of the ‘40 Act, a “qualified purchaser” is:

• An individual holding $5 million or more in investments.
• A company owned by close family members that holds $5 million or more in investments.
• A trust, albeit not one formed specifically for the investment in question, holding $5 million or more in investments, the settlor of which is a qualified purchaser.
• An investment manager with $25 million or more under management.
• A company holding $25 million or more in investments.[4]

Under Rule 501(a) of the Securities Act of 1933, an “accredited investor” is:

• An individual with a net-worth (joint net-worth if married) of more than $1 million, exclusive of a primary residence.
• An individual with annual income of $200k ($300k if married) in each of the preceding two years. The income must also be reasonably expected to continue in the current year.
• An individual that holds a FINRA Series 7, 65, or 82 securities licenses in good standing.
• A trust, not one formed specifically to invest in a particular fund, with $5 million in assets and which has a sophisticated investor guiding the trust.
• A company, not one formed specifically to invest in a particular fund, with $5 million in assets or with equity owners who are all accredited investors.[5]

The QP/AI rules are designed to protect investors by ensuring that they have sufficient expertise to evaluate investments and sufficient financial means if the investment does not perform as expected.

IV. TAXATION

It is important to note that, from a taxation perspective, PPI follows the same sections of the Internal Revenue Code as its retail counterparts. PPLI and PPVA policies both benefit from income-tax deferral,[6] which allows investments to grow on a pre-tax compounding basis, eliminating any ongoing tax drag. This can be especially advantageous for investments that are tax-inefficient because they produce ordinary income or short-term capital gains, and for investment portfolios that have a high turnover rate. The more tax-inefficient the underlying investment is, the more attractive PPI becomes. With that said, based on the typical long-term time horizon for these strategies, there is often a focus on growth to make sure the underlying fees are justified. While PPVAs and PPLI both benefit from pre-tax compounding growth, PPVAs are subject to income tax at ordinary rates once the money is distributed from the contract, either during life or at death.[7]  If withdrawals are made during life before age 59.5, they could also be subject to a penalty.[8]  PPLI policies will differ at death, with the entire policy proceeds (death benefit plus gains) typically paying out income tax-free.[9]  However, if the PPLI contract is canceled or lapses, resulting in the death benefit not being paid out, then the gains will be subject to income tax at ordinary rates.[10]  It is important to recognize that taxable events for both contract types generate ordinary income, after recovering any basis in the contract, and do not receive the benefit of preferential long-term capital gains (LTCG) rates, regardless of how long the contracts, or the underlying investments, have been held.  Income taxation is only one form of taxation to consider. There may also be estate, gift, and generation-skipping transfer tax implications to such policies, depending on policy ownership and funding.

V. OWNERSHIP STRUCTURE

From the perspective of transfer (estate, gift, and generation-skipping transfer) taxes, PPI policies provide no additional benefits and follow the typical rules that apply to other assets. The taxation benefits provided by these policies are generally limited to income taxation. However, ownership plays an important role. If a contract is owned by an individual, its proceeds will be includable in the individual’s taxable estate (potentially with an offsetting deduction if the beneficiary is a qualified charity or a spouse). If the contract is instead owned by an entity outside of the individual’s taxable estate, the proceeds may not be subject to estate taxes, and any gift and generation-skipping transfer taxes associated with the structure may be able to be minimized with proper planning. Achieving this goal requires, among other things, that the insured not retain any “incidents of ownership” over the policy.[11]  A discussion with a tax advisor is essential when implementing these structures.

Often PPLI policies are owned by an entity, usually an irrevocable trust or an LLC. Where irrevocable trusts are concerned, consideration will need to be given to whether the trust is, for income tax purposes, a grantor trust or non-grantor trust, and whether it is intended for generation-skipping transfer (GST) tax planning. It is important to remember that the AI/QP rules may be different for entities than for individuals.

In addition to the potential estate and other transfer tax consequences of an ownership structure, there may be state premium taxes assessed on the policies that need to be considered. These state premium taxes will be based on where the policy is domiciled. Even if an irrevocable trust has been established for estate planning purposes, depending on the domicile of the trust, it may be subject to less favorable state premium taxes than trusts or entities in other states. The rules governing the domicile of a trust vary from state to state and usually are based on the domicile of the grantor, the beneficiaries, the trustees, or some combination thereof. Although these rules often do not prevent the trust establishing a desired domicile, an LLC may provide greater flexibility in choosing a more favorable premium tax state. All these considerations need to be discussed when thinking about implementation.

An additional consideration is choosing the beneficiary. As an example, if the beneficiary of a PPLI policy is a qualified charity, including a private foundation, estate and income taxes can generally be eliminated upon the policy owner’s death, even if the policy has not been transferred to an entity outside the insured’s taxable estate. Finally, for foreign trusts, planning that takes into account the DNI (distributable net income) and UNI (undistributed net income) of the trust may be particularly relevant, due to the tax characteristics of PPI.

VI. FEES

When considering PPI, as with most vehicles, attention must be given to the fees that will be charged. Fees within PPI can include mortality and expenses (M&E), cost of insurance (COI), underwriting, administration, distribution or premium loads, and state and federal premium taxes. Fees for the insurance contract are separate from any fees related to the underlying investments. Fees for PPVAs tend to be more straightforward than those for PPLI due to the lack of cost of insurance and death benefit. Often PPVAs will have an M&E fee in addition to any underlying investment charges. The M&E fees may be tiered and decrease over time or as assets grow. PPLI fees may be more complicated and often are front-loaded because of state and federal taxes, distribution charges, etc. This often makes getting a generic fee quote for PPLI less straightforward than for a PPVA or traditional investment vehicle, which may be a static “xx” basis points.

One potential way to think of PPLI fees is to ask, “What is the fee ‘leakage’ over the life of the contract and, specifically, what is the delta between the internal rate of return (IRR) and the assumed rate of return?”  Due to PPLI policies often being structured with as much premium paid from the underlying funds as allowable, thus shifting the investment risk from the insurance company to the policy owner, IRR tends to be less volatile than for retail policies that are designed to maximize the death benefit. As a result, the IRR tends to be very similar whether you assume life expectancy is age 85, 90, or 95.  As an example of looking at the delta, if you are assuming the net investment fund return will be 7% and the IRR on the insurance illustration is showing 6%, then essentially there will be a 1 percent “leakage” for fees over the life of the contract, in addition to any fees for the investments themselves.  This may help provide guidance as to whether the benefits of the contract outweigh the fees that will be charged.

It is important to note that, unlike retail insurance fees, which are regulated, PPI fees are not. A policy from the same insurance company with the same design may have different fees from two different insurance brokers. PPLI policies also received an unintended benefit at the end of 2020. The Consolidated Appropriations Act, 2021,[12] contained a change to the interest rates used in life insurance testing calculations, namely the guideline premium test (GPT) and cash value accumulation test (CVAT). While these changes were made with retail life insurance in mind, they also apply to PPLI.[13]  The interest rates, which were originally fixed at 4% and 6% when they were instituted in 1984, were lowered and changed to variable rates. This change in rates changes how much premium is allowed to be paid into a policy for a given death benefit (and changes the guaranteed calculations on traditional whole life policies).[14]  With PPLI’s primary design goal being minimizing death benefit, this change allowed for further minimization and therefore a reduction in fees associated with the insurance component, resulting in increased focus on underlying investment fund performance.  This increased efficiency further narrowed the delta between IRR and investment performance.

VII. POLICY STRUCTURE: MEC VS NON-MEC

In addition to fee and ownership structure considerations, PPLI policies can be designed in a few different ways. As noted earlier, often PPLI policies are designed with the minimum amount of death benefit per given premium dollar while passing the test to meet the definition of life insurance. This minimizes the fees associated with the insurance and maximizes the amount of premium dollars going towards the underlying investment vehicles. However, there is flexibility to design the death benefit to maximize the insurance component as desired. When looking at a minimum death benefit design, there is also the issue of whether or not the policy will be considered a modified endowment contract (MEC). If a policy is designed to not become a MEC, the taxation of the owner on accessing the cash value during the lifetime of the insured is more favorable. The accounting method used will be on a first-in first-out (FIFO) basis. The FIFO accounting method allows the policy owner to withdraw funds up to the cost basis without income taxation as it will be considered a return of principal. Policy loans will also be available to access any cash value in excess of the cost basis.[15]  Like other collateralized loans, there would not be income taxes on the proceeds, but there would be some interest expense. Ultimately, a portion of the death benefit could be used to satisfy any outstanding loans, and the balance could be paid out income tax free. However, as noted previously, if the death benefit did not pay out due to the policy being canceled or lapsing, any amount received above the cost basis (including loan interest) would be taxable as ordinary income. If, instead, a policy were to be classified as a MEC, the accounting method used would be on a last-in first-out (LIFO) basis and would mirror the taxation of annuities.[16]  Gains would need to be withdrawn first and would be subject to income taxation at ordinary rates and pre-age 59.5 penalties, if applicable.  A policy loan does not prevent this result, as it does for a non-MEC. It is important to note that these changes in taxation only impact accessing the cash value and not the death benefit. As such, weighing these considerations often involves balancing the flexibility of accessing the cash value during the insured’s lifetime with other factors, such as the timing of premium payments. To avoid creating a MEC, typically the premiums need to be paid over a minimum number of years to satisfy the so-called “7-pay test” (some strategies also potentially avoid a MEC through purchasing more insurance than required).[17]  This can create an opportunity cost of having the dollars spread out over time, compared to being invested as soon as possible.  If flexibility in accessing cash value is not needed, having the premium dollars invested earlier may be beneficial. Another point of consideration is that access to the policy cash value is given only to the policy owner. This is important to keep in mind when the policy owner is an entity and not an individual. As an example, a trust may access the policy cash value, but the trustee must consider its fiduciary duties when deciding whether to do so, which, as an example, could be for the purpose of making a cash distribution to a trust beneficiary that is permissible under the terms of the governing trust instrument.

VIII. DEATH BENEFIT

While both PPLI and PPVA policies provide pre-tax compounding growth, many times the exit strategy or death benefit is the ultimate focus. As noted, PPLI death benefits are typically income tax-free, while PPVA policies will trigger ordinary income-tax on distributions, either during lifetime or at death (except for charitable beneficiaries). The death benefit of a PPLI policy is straightforward, in that it is paid in cash, income tax-free to the policy beneficiary. However, that payment may be subject to liquidity constraints on the underlying investments. PPVA policies generally have a few options, depending on the beneficiary. Options often include a lump-sum payout, payments in any increment if the account is depleted 100% within 5 years of the year of death, or a non-qualified stretch in which required minimum distributions are made over the beneficiary’s lifetime. In addition to these options, surviving spouse beneficiaries will often have spousal continuation rights, under which they can continue a contract as their own. If the beneficiary is a trust, the options may be limited to a lump-sum or 5-year distribution since a trust has no life expectancy. It should also be noted that if there are multiple beneficiaries, they may be able to make different elections. One beneficiary may choose the lump-sum option, while another beneficiary may decide to take distributions over time. These decisions often are based on the financial needs and tax considerations applicable to each beneficiary.[18]

IX. USE CASES

While the underlying investment options may be the same for PPLI and PPVA, there are key differences in structure, fees, and taxation. There are several situations in which one vehicle may be preferred over the other. PPVAs do not require underwriting and, therefore, are a simpler process. There are no medical requirements and, therefore, current health concerns are not an issue. There are also no death benefit capacity limitations that would cap the amount of premiums allocated to the investment strategy. Fees are also generally lower.

As mentioned earlier, if there are charitable intentions but also a desire to retain control over the asset, a PPVA may be preferred due to lower fee structure and simplification. The back-end taxation differences would be moot since a qualified charity would receive the gains. PPVAs may also be desired if the solution is temporary in nature, which may be the case in pre-immigration planning or a move to a lower-tax state. As an example, a resident of a high-tax state may anticipate retiring in a lower-tax state. The fact that taxes will be due on the gains may be a moot point if the intent is to defer gains until establishing residency in a lower-tax state while also benefiting from the pre-tax compounding growth. Consideration would need to be given to the ordinary income taxation of a PPVA compared to potential LTCG treatment with other vehicles.

PPLI may be preferred in a wealth transfer and multi-generational planning scenario in which the beneficiaries are children or grandchildren and the ability to receive an income tax-free death benefit inside of an irrevocable trust is important. Typically, assets within an irrevocable trust are shielded from estate and potentially GST taxation, but do not receive a “step-up” in tax basis at the grantor’s death.[19] However, an appreciated asset inside a PPLI policy in effect receives a step-up in tax basis because the proceeds from that asset can ultimately be paid out as income tax-free cash.  With a PPLI policy owned by an irrevocable trust, it may be possible for assets to grow on a pre-tax compounding basis and then transfer free from income, estate, and GST taxation.

X. POTENTIAL ISSUES

While there are numerous benefits to PPI strategies and a recent increased focus resulting from investment option expansion, increased fee efficiency, and fear over rising taxes, PPI is not for everyone and has important considerations and drawbacks. Regarding PPLI, there are insurability and medical underwriting requirements, and not all potential insureds may qualify, or the insured may already have a large amount of life insurance and not have the financial capacity to purchase as much additional insurance as desired. An important feature of these instruments is that they are funded with cash and therefore require liquidity. This can cause concern if the necessary cash can only be raised by selling investments with gains. This can be of particular concern   with irrevocable trusts that have already been funded and have invested their assets. With irrevocable trusts, another consideration can be how to fund the trust if it is not already funded or does not have sufficient assets to purchase the policy and pay the required premiums on an ongoing basis. This can require the use of lifetime exemption, potential gift tax exposure, or making an interest bearing loan to the trust at the applicable federal rate (AFR). Even if an irrevocable trust is already funded and liquid, as noted earlier, there may be considerations as to the state in which it is to be domiciled, and the expenses associated with creating an LLC as an alternative. In addition to funding and liquidity concerns, investor control, and the potential lack of flexibility in the available underlying investments, can be additional concerns. If an individual does not like the menu of funds available and does not like giving up control to an investment manager of an insurance dedicated SMA, the benefits of the structure may be a moot point. Also, it should be noted that if a client changes his or her mind and decides to exit the arrangement, that decision can be very costly to the client. While PPI policies do not tend to have similar surrender periods to their retail counterparts, if the client would otherwise have invested in strategies that are eligible for more favorable LTCG treatment, the resulting ordinary income taxation on the gains and the additional fees paid for the PPI contract could be disadvantageous to the client. In addition, a rising tax environment may be harmful both when a client changes his or her mind and decides to exit the arrangement and in arrangements, such as PPVAs, that defer, but do not eliminate, income taxation. The anticipated “lower” tax environment may not be “lower” in the future.[20]

XI. CONCERNS IN THE MARKETPLACE

There are also several concerns within the marketplace in general. These are centered around abuse and the intention and spirit of the laws governing PPI. Concerns revolve around investor control, a doctrine that is sometimes criticized as being ambiguous and open to interpretation, and how PPI policies are funded or invested. PPI policies can be both onshore and offshore, and offshore policies may make an IRC Section 953(d) election to be US tax compliant. Offshore policies, even when electing to be US tax compliant, have raised concerns surrounding in-kind funding and not requiring cash only funding. There have also been investor control abuses and differing interpretations of what conduct violates the prohibition on investor control. Many individuals look to either directly or indirectly control the investments.

One topic that has been debated is the concept of having a PPLI policy own a private company, including through transactions that involve the use of derivatives. The concept would be that the sale of the company would occur within the PPLI policy and, if a large gain is realized, it would be shielded from income taxes. The IRS might argue that this structure violates the investor control doctrine and diversification requirements applicable to PPLI. A simpler approach may be for them to attach the valuations used. Aggressive tactics that “work until they don’t” subject the policyholder to the risk of losing the tax and other benefits of PPLI, and to possible interest and penalties going back many years. Often, scrutiny may not occur during life, but is likely to occur at death, when the estate tax audit occurs and the IRS inquires further into the insurance policy, which may be decades after the policy was originally implemented. The federal estate tax return requires disclosure of all insurance on the decedent’s life in effect at the time of death, whether or not included in the estate for estate tax purposes.[21]

A Tax Court case imposing retroactive scrutiny is Webber v. Commissioner,[22] in which the IRS found investor control violations in thousands of emails between the taxpayer and the investment manager dictating investment decisions.[23]  Separately, Swiss Life made headlines in May 2021 when it agreed to pay $77.4M ($25.3M fine plus $52.1M in restitution and forfeiture) and provide policy holder information for accounts closed between 2008 and 2019 to resolve a criminal case regarding assisting US clients with tax evasion.  More than 1600 insurance policies and $1.45B of assets were within the scope of the case.[24]  In addition, Senator Ron Wyden, chairman of the United States Senate Committee on Finance, launched an inquiry into private placement insurance companies in August 2022, voicing concerns that policies are being used as a tax loophole for the wealthy and not truly being purchased for insurance purposes.  The inquiry started with Lombard International and eventually included other insurance companies, questioning their practices.[25]  Early in 2024, Senator Wyden released a report noting his findings and recommended change in taxation of Private Placement Insurance, creating distinction between traditional insurance and Private Placement Insurance. The distinction would note PPLI and PPVA as “covered contracts.”  President Biden’s FY25 budget proposal[26], often referred to as the Greenbook, proposed changes to the taxation of PPLI and the death benefit. It is especially important to note that the proposal from Senator Wyden’s findings had desire to be retroactive, meaning that Senator Wyden wanted existing PPLI policies to become taxable, not just future contracts. Ultimately the proposal did not proceed, perhaps because 2024 was an election year and a change in administration was looming. However, there may be concern that PPLI is now “on the radar” from this previous proposal and further political administration changes could result in legislative risk, especially given many of these contracts have an anticipated multi-decade time horizon.

XII. CONCLUSION

As with many financial instruments and strategies, there are pros, cons, and considerations to private placement insurance. The industry has and is projected to continue to grow significantly[27] and there have been more articles and attention to it in recent times, both positive and negative. As outlined in this paper, there are considerable tax advantages associated with PPI contracts. Qualified purchasers and accredited investors may have greater access to tax-inefficient asset classes within PPLI, which may allow policy performance and growth to be based on these asset classes. This may allow for additional diversification within a portfolio or potentially higher growth than a corresponding retail insurance policy. It is imperative that investor control and diversification rules are followed to benefit from the tax advantages. A growing concern for aggressive tactics has brought additional scrutiny to the industry and design of private placement insurance policies. All these factors must be considered when assessing whether PPI is appropriate in a given circumstance.

Russell DeLibero is the Chief Wealth Planning Officer at Oxford Financial Group Ltd. In this role, he leads complex and sophisticated estate and wealth planning initiatives while providing strategic direction to the Family Office Services Technical (FOST) team. He is also a member of Oxford’s Senior Leadership Team.

Russell earned a Bachelor of Science degree in Finance from Rutgers University and a Master of Science degree in Financial Services from The American College. He later earned his Doctor of Philosophy (PhD) in Financial and Retirement Planning from The American College.

Russ holds the CERTIFIED FINANCIAL PLANNER^™ (CFP^®), Chartered Financial Consultant (ChFC^®), and Chartered Life Underwriter (CLU^®) and the Accredited Estate Planner (AEP^®) designations. A recognized thought leader, Russ is a national speaker and author, presenting at leading institutions such as Heckerling, National Association of Estate Planners & Councils (NAEPC), USC, and Emory. He is also a member of the Atlanta Estate Planning Council.

ABOUT THIS PAPER

The views and opinions expressed in this paper are solely those of the author and do not reflect the views and opinions of Oxford Financial Group Ltd. The information herein is provided solely to educate on a variety of topics, including wealth planning, tax considerations, executive compensation, and estate, gift, and philanthropic planning. While this material is based on information believed to be reliable, no warranty is given as to its accuracy or completeness, and it should not be relied upon as such. Information and opinions provided herein are as of the date of this material only, November 2025, and are subject to change without notice. Tax results may differ depending on a client’s individual positions, elections, or other circumstances. This material is based on the assumptions stated herein. In the event any of the assumptions used do not prove to be true, results are likely to vary substantially from the examples shown herein. The examples and assumed growth rate(s) stated herein are provided for illustrative purposes only; they do not represent a guarantee that these amounts can be achieved, and no representation is being made that any client will or is likely to achieve the results shown. Assumed growth rates are subject to high levels of uncertainty and do not represent actual trading and, thus, may not reflect material economic and market factors that may have an impact on actual performance. Oxford Financial Group Ltd. has no obligation to provide updates to these rates. Oxford Financial Group Ltd. does not provide accounting, tax or legal advice to its clients and all investors are strongly urged to consult with their own advisors before implementing any structure, investment plan, or strategy. Notwithstanding anything in this document to the contrary, and except as required to enable compliance with applicable securities law, you may disclose to any person the US federal and state income tax treatment and tax structure of the transaction and all materials of any kind (including tax opinions and other tax analyses) that are provided to you relating to such tax treatment and tax structure, without Oxford Financial Group Ltd. imposing any limitation of any kind. Information related to amounts and rates set forth under U.S. tax laws are drawn from current public sources, including the Internal Revenue Code of 1986, as amended, as well as regulations and other public pronouncements of the U.S. Treasury Department and Internal Revenue Service. Such information may be subject to change without notice. In some cases, rates may be estimated and may vary based on your circumstances.

[1]  IRC Section 7702

[2]  Katz, J. and Vail, C., The Insurance Dedicated Fund Marketplace Explained (Jul. 12, 2019), https://www.wealthmanagement.com/insurance/insurance-dedicated-fund-marketplace-explained

[3]  IRC Section 817(h)

[4] Section 2(a)(51) of the ‘40 Act.

[5] Rule 501(a) of the Securities Act of 1933

[6]  IRC Section 7702(g)(1)(a) and Treasury Regulations Section 1.72-2(a)(1)

[7]  IRC Section 72(a)(1)

[8]  IRC Section 72(t)(1)

[9]  IRC Section 101(a)(1)

[10]  IRC Section 72(e)(3)

[11]  IRC Section 2042

[12]  Text – H.R.133 – 116th Congress (2019-2020): Consolidated Appropriations Act, 2021, H.R.133, 116th Cong. (2020), https://www.congress.gov/bill/116th-congress/house-bill/133/text.

[13]  IRC Section 7702

[14] Kwassman, S., Recent Change to IRC 7702 Interest Rates and Impact On Life Insurance Products (Feb. 2021)  https://www.soa.org/sections/product-dev/product-dev-newsletter/2021/february/pm-2021-02-kwassman/

[15] See, IRC Sections 72(e)(3) and IRC 72(e)(5)

[16] See, IRC Section 72(e)(10)

[17] See, IRC Section 7702A

[18] Schell, J., Annuity beneficiaries: Death Benefits & Payout Options. (Feb. 23, 2023), https://www.annuity.org/annuities/beneficiaries/

[19]  IRC Section 1014(b)

[20]  IRC Section 72(e)(3) and IRC Section 72(e)(5)

[21]  Form 706, Schedule D

[22]  Webber v. Commissioner, 144 T.C. 324 (2015)

[23]  Gray, T. and Weber, Jr., J. The Investor Control Doctrine: Alive and Well, (Jul. 8, 2015), https://www.faegredrinker.com/en/insights/publications/2015/7/the-investor-control-doctrine–alive-and-well

[24]  Hals, T. and Stempel, J. Swiss Life to pay $77.4 mln to Settle U.S. Criminal Tax Evasion Case, (May 14, 2022). https://www.reuters.com/business/legal/swiss-life-pay-774-mln-settle-us-criminal-tax-avoidance-case-2021-05-14/

[25]  United States Senate Committee on Finance, Wyden Launches Investigation Into Private Placement Life Insurance Schemes (2022)https://www.finance.senate.gov/chairmans-news/wyden-launches-investigation-into-private-placement-life-insurance-schemes

[26]  Department of the Treasury  General Explanations of the Administration’s Fiscal Year 2025 Revenue Proposals, (2024) https://home.treasury.gov/system/files/131/General-Explanations-FY2025.pdf

[27]  JC Market Research The global PPLI Market is Projected to Reach A Value of US $211,737.1 Million in 2031 With A Significant CAGR of 12.4% Over the Forecast Period 2022-2031(Nov. 21, 2022), https://www.globenewswire.com/news-release/2022/11/21/2559765/0/en/Global-Private-Placement-Life-Insurance-Ppli-Market-%D0%86%D1%95-%D0%A0r%D0%BE%D1%98%D0%B5%D1%81t%D0%B5d-T%D0%BE-R%D0%B5%D0%B0%D1%81h-%D0%90-V%D0%B0lu%D0%B5-%D0%9Ef-U%D1%95-211-737-1-%D0%9Cn-%D0%86n-2031-With-A-Significant-Cagr-Of-12-4-Over-The-Forecast-Period-2022-2031-Cumu.html