Keep the strategy. Change the structure.
A private structure that lets serious money stay invested the way it is today, while its growth goes untaxed, you can still get to the money, and what remains passes to the people you choose.
What it is, in plain terms.
Its formal name is private placement life insurance, or PPLI. It is a custom life insurance policy built for large investment portfolios. You own the policy. Your money is invested inside it, in an account kept separate from the insurance company's own money. A professional manager you approve runs the investments. The insurance part is kept as small and cheap as the law allows, so most of what you put in stays invested.
A taxable brokerage account
- Every dividend, coupon and realized gain taxed the year it happens
- A tax bill every time your manager sells something at a profit
- Assets that sit in your name, inside your estate
The structure
- Growth that goes untaxed while it stays inside
- Cash value you can reach through loans and withdrawals
- A death benefit that reaches heirs free of income tax
Most life insurance puts your money into the insurance company's conservative investments. This doesn't. Your money stays in the same kinds of investments it's in now. What changes is how it's taxed.
One structure, six jobs.
Most planning tools solve one problem. This one handles growth, access, protection and inheritance at the same time.
Untaxed growth Grow
Interest, dividends and gains stay invested with no yearly tax bill. Your manager can buy and sell inside it without triggering taxes.
Access Use
Reach your cash value through policy loans and withdrawals, on your own timeline.
Legacy Pass on
The death benefit reaches your beneficiaries free of income tax. Owned by the right trust, it isn't counted toward estate tax either.
Protection Defend
Your account is kept separate from the insurance company's own money, so its creditors can't reach it, and many jurisdictions give life insurance strong protection from creditors.
Privacy Discretion
It is a contract, not an entity. It isn't recorded in public registries, and what sits inside it doesn't show up in property records or on a blockchain.
Simplicity Consolidate
One structure, one manager and one annual statement, in place of a stack of brokerage accounts and 1099s.
Far more than a retail policy allows.
Retail variable policies offer a short menu of mutual funds. This structure can hold the kinds of investments large family offices use, through funds built specifically for this purpose.
Investments go in through vehicles the carrier holds, chosen by an independent manager. You set the strategy and the manager picks the holdings. That separation is what keeps the growth untaxed. Some insurance companies will accept investments you already own, so you may not have to sell them first.
Same return. Different structure.
Both accounts start with the same money and earn the same 6.5% a year. The only difference is where the tax lands. Move the slider to see your own figure.
Illustration by Michael Malloy CLU TEP RFC, scaled from his figures per $10M. Assumes 6.5% a year, net of investment-management and advisory fees. The structure's line also carries assumed mortality and administrative charges, which is why it compounds a little below 6.5%. The taxable account assumes 49.62% on ordinary earnings (37% federal, 8.82% NY, 3.8% NIIT), 20% on dividends and long-term gains, and a 60/40 short-term to long-term mix. The gap is biggest for money that throws off a lot of taxable income: hedge funds, private credit, frequent trading, high dividends. Actual charges, returns and tax results vary.
Starting at 60 or 70 still works.
You already built the wealth. The question is how much more of it you keep working, and how much you pass on.
More runway for growth
Ten to twenty years or more of untaxed compounding. More money stays invested instead of leaving the portfolio for taxes, and a death benefit builds alongside it.
Legacy moves to the front
Even with fewer years ahead, removing the yearly tax on millions of dollars adds up. The death benefit adds value and liquidity for the family. The work shifts from building wealth to repositioning what already exists.
Insurance is underwritten, so age and health shape the cost. Insuring a younger family member, or two lives together, can bring that cost down.
The rules it is built around.
The structure works because it follows a short list of federal rules. These are the ones your advisors will check.
Definition of life insurance
The policy has to meet §7702, through either the cash value accumulation test or the guideline premium and corridor test. Fail it and the growth is taxed. Funding is also designed against §7702A so the policy doesn't become a modified endowment contract, which would make loans and withdrawals taxable.
Diversification
Each separate account has to meet the §817(h) diversification tests, which in practice means at least five investments with no single one dominating. This is why a single asset can't simply be dropped in.
Investor control
You can choose a strategy and a manager. You can't pick or direct the individual holdings. Cross that line and the IRS treats you as the owner of the assets and taxes the growth. The courts have upheld this, and the structure is built to respect it.
Ownership and estate
Owned by an irrevocable life insurance trust, the death benefit can stay outside the insured's taxable estate. Gift and generation-skipping rules apply to how premiums reach the trust.
Built for families investing at scale.
The structure is offered only to investors who meet federal thresholds for accredited investors and qualified purchasers. The math is strongest when three things are true at once.
At this size, the cost of the structure shrinks quickly against the tax it removes.
Smaller amounts can still make sense when the money is heavily taxed today and can stay invested a long time. We'll look at it with you.
Money you can leave invested for ten years or more, owned by people paying high taxes on investment income.
Your advocate, with a specialist beside her.
Aimee Spencer
Founder of The Untaxables, with twenty years in finance, insurance and wealth strategy. Aimee sits between your CPA and your attorney and works for you, so the recommendation is never tied to a product. She is your first call and your point of contact from start to finish.
Michael Malloy CLU · TEP · RFC · EWP Financial
More than forty years designing these structures for families around the world, and the author of two books on the subject. Aimee works alongside him on the EWP Financial team, so you get her as your advocate and his depth on the design.
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