This arrangement centers around a life insurance policy acquired through a non-public offering. The policyholder, often a high-net-worth individual, gains access to investment options typically unavailable in conventional retail insurance products. An example would involve an accredited investor purchasing a life insurance contract from a specialized firm that invests premiums in alternative assets. This allows for potential tax-advantaged growth and wealth transfer.
Such a strategy offers advantages like amplified investment flexibility and potential for higher returns compared to traditional life insurance. The structure can provide estate planning benefits, shielding assets from estate taxes and facilitating efficient wealth transfer to beneficiaries. Historically, these plans have been employed by sophisticated investors seeking to diversify their portfolios and optimize their tax liabilities.
