3. No Surrender Charges
Unlike retail life insurance and annuity structures, there are no contractual surrender charges. The contract’s cash value can be accessed when needed, subject to the liquidity constraints of the underlying investments.
4. Exposure To A Variety Of Alternative Money Managers, Strategies, And Asset Classes
Private placement life insurance and annuity contracts have emerged as an attractive medium for exposure to traditionally high-tax, income-producing alternative asset classes. Both life insurance and annuity structures offer tax advantages—accomplishing temporary or permanent tax-deferral.
5. Transparent Pricing Structure
Transparent pricing structure is the concept of telling the client the total fee including the manager and do diligence fee, trading fee and the custodian fee added to Schechter’s fee, compared to other firms that only tell the client their fee and nothing else.
Who Is An Ideal Candidate For Private Placement Life Insurance?
There’s no way to sugarcoat it, you have to be exceptionally wealthy to play in the private placement world. Accredited investors or qualified purchasers are required to contribute a minimum of $2 million into a private placement life insurance policy to set it up.
However, you get what you pay for.
With a properly structured private placement policy, clients are able to capture returns without the high tax implications typically associated with hedge fund investments. This equals healthy wealth accumulation for a client’s lifetime, to preserve for their heirs, and for charitable contributions, if they so choose.