About this episode

This episode discusses the impact of Cost of Insurance charges on the performance of Private Placement Life Insurance.

One of the most important—but least understood—factors affecting Private Placement Life Insurance (PPLI) performance is: 👉 COI — Cost of Insurance charges These charges can materially affect long-term policy returns, especially over time. ⚖️ 1️⃣ What Is COI? COI stands for: 👉 Cost of Insurance It represents the recurring insurance expense charged by the carrier for: • Mortality risk • Policy administration • Insurance coverage obligations 💸 2️⃣ How COI Affects Policy Performance COI charges are deducted from: • The policy’s cash value This means: 👉 Less money remains invested inside the policy. 📉 3️⃣ Direct Impact on Returns Because COI functions as an ongoing expense: • It reduces: Net investment growth Compounding efficiency Long-term Internal Rate of Return (IRR) Even if the underlying investments perform well: 👉 Higher COI charges can materially reduce overall policy performance. 📊 4️⃣ Why COI Becomes More Important Over Time A critical feature of many policies: 👉 COI charges generally increase with age. As the insured gets older: • Mortality risk rises • Insurance expenses increase Result: ⚠️ The drag on returns tends to grow over time. 🧠 5️⃣ Long-Term IRR…

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• IRS Investor Control Scrutiny in PPLI Structures · June 1, 2026 · 3 min
• How PPLI Helps Manage Appreciated Assets · May 31, 2026 · 2 min
• Using PPLI to Reduce Net Investment Income Tax · May 30, 2026 · 2 min
• PPLI as a Tax-Efficient Wrapper for Hedge Funds · May 29, 2026 · 2 min
• PPLI as the Next Frontier in Tax-Advantaged Wealth Growth · May 28, 2026 · 2 min
• Due Diligence Considerations Before Selecting a PPLI Carrier · May 26, 2026 · 2 min

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