Interpreting PPLI Illustrations
In our article in last month’s issue,1 we provided an overview of the basics of private placement life insurance (PPLI). Now, we’ll explore the practical considerations involved in purchasing and structuring a PPLI policy.
An insurance agent should provide an illustration of the insurance product. The purpose of this illustration is twofold: It outlines hypothetical policy performance for a particular client based on straight-line return assumptions, using a specific funding pattern that typically helps the agent achieve their second goal, which is to sell the policy. The illustration states the various policy expenses, such as cost of insurance (COI), mortality and expense, state premium tax and federal deferred acquisition costs. In add…
