How Can Private Placement Offshore Variable Universal Life Insurance Benefit Me?
Private Placement Offshore Variable Universal Life Insurance
Offshore universal variable life insurance policies offer advantages for investors such as the opportunity to build cash value on a tax deferred, IRS-compliant basis. Capital gains, dividends, and interest in the policy accrue free of current U.S. taxes.
An accredited investor should consider a private placement universal variable life insurance policy (PPVUL) when flexible and tax-advantaged estate planning goals are sought. The PPVUL offers tax efficiency and investment access to a broad range of international asset management strategies.
Protection of Assets
According to author Hoyt L. Barber in “Freedom Without Borders: How To Invest, Expatriate and Retire Overseas for Personal and Financial Success,” (2011) Swiss universal variable life insurance policies offer twin benefits of insurer financial strength and favorable tax treatment. Both U.S. and Canadian citizens may hold Swiss life insurance products.
Offshore insurers are often able and willing to tailor the PPVUL to the client’s needs, according to “The Lifeboat Strategy” by Mark Nestmann (2011). The author explains that an entity or policyholder operating an international business may structure the PPVUL to allow all business profits to accumulate free of current taxes.
The policy or annuity may be placed in an offshore trust, e.g. an asset protection trust, in the policyholder’s name—an individual or joint account–or beneficiary. Most policies are structured in five or 10 year renewable terms, although longer (up to 50 years) terms may be structured.
The term of the policy is also known as its deferment or accumulation period. In some cases, the term of the policy may be changed during its duration. At the policyholder’s death, the beneficiary receives a life insurance benefit free of all income taxes.
Payments to the Private Placement Offshore Variable Universal Life Insurance policy may be arranged through a Premium Deposit Account, or according to the policyholder’s financial adviser’s instructions. The Premium Deposit Account allows the policyholder to make deposits intended for insurance premium payments prior to their collection date.
Importantly, because the offshore variable life policy is protected by the insurer’s financial strength, identifying a financially sound and robust insurance company is key. Most substantial life insurance policies written by an insurer are subject to reinsurance, an added protection.
The policyholder or his adviser must direct the general assets in which the PPVUL invests. However, the owner or adviser may not identify the specific investments. Investors can select a variety of investment types, including foreign securities markets, hedge funds, metals, and collectibles.
Are you a qualified investor? Contact us to see if Karlsberg could be the right life insurance for you.