As a youngster growing up in the Panama Canal Zone, I remember watching the Beatle movies (Yellow Submarine, Help, and A Hard Day's Night) at the Balboa Theater at the Saturday morning matinee. I remember that the ticket was twenty-five cents and Sweet Tarts for a dime. You also know that in other articles that I have taken some shots at The Beatles in comparison to the Bee Gees. Nevertheless, I am a fan of their song “Got To Get You Into My Life” which marked a move in a new direction in the Beatles' - horns. Other horn-based groups like Earth, Wind and Fire, Chicago, and Blood, Sweat and Tears would also cover the song, doing it great justice. This article asks the question “What does it take to get you into my life (PPLI)”?
PPLI is the most tax-advantaged insurance and investment product not only on Planet Earth but the Universe. It should not even be an argument. PPLI is an institutionally priced variable universal life insurance policy with customized investment options. Since 1913, life insurance has received tax-favored treatment in the Internal Revenue Code - 1) Tax-free inside buildup of the cash value; 2) Tax-free loans and withdrawals; 3) Tax-free death benefit. The products became more sophisticated over the decades including variable universal life. The differences between retail and private placement life insurance are significant. The sales loads in retail variable life require 8-10 years to amortize the sales loads. PPLI has loads which are commensurate with investment products (50-100 basis points). PPLI has no surrender charges and provides for open architecture in the design and creation of the investment options.
Summary
I have been preaching the gospel of PPLI since 1999. The industry has grown significantly but is still nowhere near its planning potential. Obviously, there is nothing wrong with death protection as a primary motivation for the purchase of life insurance. However, on the “real” side, PPLI is all about the institutional pricing, investment flexibility and tax-advantaged benefits. Got To Get You Into My Life!