Private Placement Life Insurance Fee Drag Analyzer

See how private placement life insurance (PPLI) fees affect net performance. Provide the invested premium and gross crediting rate, then optionally adjust the total policy fee load and the tax drag you would incur in a taxable brokerage account. The calculator displays the net return after charges, the dollar fee drag, and whether PPLI still outperforms taxable investing.

Net premium allocated to the policy's separate account.
Modeled pre-fee annual return from the policy's investment sleeve.
Defaults to 1.50% to reflect insurance charges, admin load, and asset manager fees.
Defaults to 1.20% to mimic blended income and capital gains leakage in a brokerage account.

Confirm policy charges, tax treatment, and accredited investor requirements with your insurance carrier, attorney, and tax advisor before funding a PPLI strategy.

Examples

  • $2,500,000 premium, 8.00% gross, 1.50% fees, 1.20% taxable drag ⇒ Net credited return 6.50% ($162,500.00) • Fee drag 1.50% ($37,500.00) • Taxable alternative 6.80% ($170,000.00) • Policy advantage −0.30% (−$7,500.00) • Break-even fee ceiling 0.30%.
  • $1,800,000 premium, 7.20% gross, 0.95% fees, 1.50% taxable drag ⇒ Net credited return 6.25% ($112,500.00) • Fee drag 0.95% ($17,100.00) • Taxable alternative 5.70% ($102,600.00) • Policy advantage 0.55% ($9,900.00) • Break-even fee ceiling 1.50%.

FAQ

Can I include premium load or upfront charges?

Yes. Convert them into an annualized percentage by dividing the load by expected years in force, then add that figure to the policy fee input.

How should I model institutional share classes inside the policy?

Reduce the fee percentage to reflect the lower asset management costs available inside PPLI compared to retail funds.

Does the calculator handle policy loans or withdrawals?

No. It assumes assets stay invested. Run separate projections for loan spreads or withdrawal sequencing and add the results to this fee drag view.

What tax drag should I use for municipal bond ladders?

Set the taxable drag near zero for tax-exempt income streams, or input the expected haircut if a portion of coupons remain taxable at your marginal rate.

Additional Information

  • Fee rate bundles mortality & expense charges, administration, and asset management wraps into a single annual percentage.
  • Tax drag approximates recurring taxes on interest, dividends, and capital gains distributions in a taxable portfolio.
  • Outputs reflect a one-year snapshot; layer multi-year projections or policy borrowing separately when modeling full plans.
  • Break-even fee ceiling shows how high total policy costs can rise before PPLI loses its net-of-tax edge versus taxable investing.

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