Life Insurance




A family office in the United Kingdom is well equipped to help you put a private placement life insurance in place. Life insurance solutions are increasingly used by wealthy families as a wealth planning structure for wealth protection, tax and estate planning, and/or as a privacy structure.



There is a huge variety of life insurance products on offer around the world today. Some of these international life insurance solutions are known as private placement life insurance. With this product, investment portfolios are kept ring fenced in an insurance instead of in a bank account. Normally, this sort of life insurance product is set up as unit-linked insurance, which means that the proceeds of the life insurance that are ultimately to be paid out depend on the performance of the securities kept in the life insurance policy. This kind of life insurance policy in particular is regularly used by family offices in order to structure the investment portfolios of their clients.


  • Before you take out a life insurance policy, your investable assets are held in an investment portfolio with a private bank, and the investments’ returns are taxed annually. When you die, these assets form part of your estate and transfer to your heirs in accordance with the applicable inheritance laws.
  • After taking out a private placement life insurance policy and the transfer of your investment portfolio or payment of the premium in cash to the life insurance company, you become a policyholder. The life insurance company opens a dedicated account at a private bank for the underlying assets of your policy.
  • Jointly with the life insurance company and your family office, you select an investment strategy according to your risk profile, and the bank manages that account on behalf of the insurance company; alternatively, you appoint the multi family office as the asset manager who will be responsible for all investment decisions. From that moment on you will only be indirectly entitled to the performance of the investments as a beneficiary of the insurance policy as the life insurance company has now become the legal owner of the investable assets.
  • The investable assets are no longer considered your own assets as a result of the transfer and you will only have to pay income tax on the proceeds of the policy i.e. the investments when the life insurance pays out to you i.e. tax payment is deferred. In a considerable number of countries mostly in Europe there are also other tax benefits, such as an exemption of wealth tax and lower income tax rates on pay-outs made during your lifetime, and no inheritance tax is due on the value of the policy at death.
  • In order to make the life insurance policy financially attractive, the death cover of the insurance in most private placement life insurance policies is reduced to the absolute legal minimum, which results in relatively low product costs cost of insurance. The private bank used by the insurance company to deposit the assets custodian bank is often the same bank that held your investment portfolio. In most cases, the portfolio management department of that bank will manage the investments as of the moment that you have changed to private placement life insurance, or your multi-family office will act as the asset manager. The tax consequences of a life insurance are different for every country.


If the life insurance solution is set up correctly meaning that the policy is set up tax compliantly and not simply used as a wrapper, your investable assets will be completely separated from your other assets, resulting in solid asset protection. Because the life insurance company is registered as the owner of your investable assets and as the ultimate beneficial owner of the account, your privacy is also protected. The contributed assets are not affected should the insurance company or the custodian bank go bankrupt, as they are separated from the risk sphere of the insurer and the bank.


It is not only possible to put investment portfolios into life insurance solutions: real estate, operational companies and any other valuable assets can also be held in life insurance solutions. Although the major providers of this type of life insurance services can be found in Liechtenstein, Ireland, Luxembourg and Singapore, the underlying investments can always be custodied in a Swiss private bank. This wealth planning solution is not provided out of the UK, but a UK family office will of course help you to put the structure in place as one of the many multi family office services it provides.


Whether you have any questions about the use of private placement life insurance, intend to select a multi family in Europe , or want to discuss wealth planning services in general, please feel contact us directly. We look forward to assisting you.

Except for cash positions kept in the life insurance policy.


An increasing number of affluent families are taking out universal life insurance as part of their global estate planning and wealth structuring. Due to the large insured amounts, universal life insurance is also referred to as ‘jumbo life insurance’ or ‘jumbo universal life’.

Simply put, universal life insurance is a life insurance policy that offers very high death coverage, both as a percentage often over 300% of the premium paid; i.e you pay a premium of $3 million and the beneficiaries receive $9 million or more at demise and in absolute numbers sometimes over $90 million.

What makes universal life insurance stand out from other life insurance products is the fact that it combines high death coverage with an actual savings component over the years the value of the policy grows, with a guaranteed interest rate.


Universal life insurance is a type of life insurance that offers very high death coverage. It combines this with a savings component, the premium the policyholder pays is for the most part invested by the life insurance company to provide a cash value build-up every policy will have a so called Cash Value which can be viewed by the policyholder as an alternative asset class akin to a savings account or investment product.

Universal life insurance policies are mostly used:

  • as a liquidity planning tool in case of demise estate planning
  • to compensate for inheritance tax charges, for example on foreign property tax planning I.e. UK inheritance tax 40% will be applicable to the value of London real estate on the demise of the owner,
  • to plan for complex estates with numerous family members succession planning i.e. to create liquidity in the context of family business succession to benefit non active family members or to settle existing debts without liquidating businesses or investments
  • to provide family security protect the family’s lifestyle in the event of a tragic loss wealth planning
  • to avoid probate or
  • as an attractive alternative investment diversification.

Within the life insurance spectrum, universal life insurance is the exact opposite of private placement life insurance. A jumbo life policy has very high death coverage, whereas a policy offers the bare minimum of death coverage.


Traditional life insurance

In traditional life insurance premium is based on a given level of insurance cover. If the insured event happens, then the agreed insurance cover is paid out. If the insured event does not take place, or the policyholder stops paying the premium, then the sum of all premiums paid so far is lost. Premiums therefore form a pure cost for the policyholder, unless the insured event actually happens.

Universal life insurance

Premium paid for a universal life policy might be better termed a deposit. A sizeable cash payment deposit is made to the insurer to obtain the universal life insurance policy and the policy holder immediately receives the agreed insurance cover i.e. a premium of $3 million is paid and the beneficiaries receive $9 million when the insured life passes away. In addition, the universal life insurance company annually credits a guarantee dinterest to this deposit of the policyholder’s. The insurance company calls this deposit the Cash Value. It consists of the full premium a policyholder has paid, minus the costs of insurance and other costs, such as the insurance company’s and the broker’s fees.

The tax consequences of a life insurance are different for every country.


So, unlike with the above-mentioned traditional life insurance, the premium paid is not lost. The universal life insurance company is able to offer interest on the Cash Value by collecting each and every deposit from all the policyholders on its own general investment account and investing it into investment grade, long term, conservative fixed income style investments the actual underlying investments vary slightly from one insurer to another.

Due to this long term nature of the underlying investments, the insurers are able to pay a relatively high interest rate compared to the current average market rate. They also commit to paying a guaranteed minimum interest rate, so universal life insurance functions as an actual investment for the policyholder. The cash value will generally increase and after a number of years will exceed the premium paid.

This is an example for illustration purposes only.


The universal life insurance policy may be based in different currencies but is usually denominated in US dollars. The policyholder is given flexibility for funding the insurance, with the option either of providing a lump sum deposit single pay or of paying annually multi pay over a number of years.


The policy itself is also highly flexible. The death coverage and beneficiaries can be reviewed and modified as the insured party’s circumstances change throughout their lifetime. The policyholder is entitled to add to their premium in the future.

The policyholder has full access to the savings component (Cash Value) of the policy, which can be increased, drawn down and pledged if needed. Full or partial surrenders are possible at any time: the policyholder may withdraw funds at any time from policy, perhaps to fulfil a liquidity need or to take profits when the cash value is increasing more than the policyholder requires.

When taking out a universal life insurance policy, one needs to decide who will be the beneficiary of that policy. This does not necessarily have to be a natural person it can also be a structure, such as a trust. Once the policy is in place it is possible to change the beneficiary provisions alterations can be made to react to changing family circumstances or because this is necessary due to relocation to a foreign jurisdiction.


Due to the high risk component death coverage of , affluent families wishing to purchase one have to undergo strict underwriting. This covers both medical underwriting and financial underwriting. Interested individuals are required to undergo a thorough medical assessment at an approved clinic. The insurance terms are offered on the basis of the actuarial risk assessed from this underwriting process. This may also mean that persons resident in certain jurisdictions, or of a certain age or constitution, will not be able to have terms offered at all or only less attractive terms.


Due to the fact that the policy has a Cash Value when it is surrendered the Cash Surrender Value it is possible to obtain a loan to finance a considerable part of the premium. The collateral for that loan will be formed by the issued insurance policy. Obtaining a loan at a later stage is also possible. Due to the conservative way in which the insurance companies invest, some private banks are willing to finance the premium up to 85-90% of the Cash Surrender Value, which is comparable to approximately 75-85% of the premium itself. Please note, however, that the loan would first need to be repaid to the bank before the policyholder or a beneficiary can benefit from any distribution of the policy.

This possibility creates a lot of additional wealth planning options for affluent families, especially for the ones that are asset-rich, but short of liquidity. By taking out financing for the policy they are able to obtain much higher death coverage.


Death cover:USD 9,000,000
Premium:USD 3,000,000
Cash Surrender Value at day 1:USD 2,750,000
Loan from bank:USD 2,475,000 90%
Cash investment of the policyholder:USD 525,000


This is an example for illustration purposes only.


A genuine insurance, paying large amounts, it often benefits from tax benefits in the home jurisdiction of the policyholder and or beneficiary. Depending on the jurisdiction where the policyholder is living and the purpose of taking out a policy, a Universal Life Insurance can be held in one’s own name but is usually combined with a wealth planning structure such as a company, trust or foundation.

Universal Life Insurance is only offered by a very select group of life insurance companies and only a handful of specialised insurance brokers provide advice on it. A few multi family offices, private banks and specialised wealth advisors can assist you with putting the necessary structure in place.


Whether you have any questions with regards to this subject, intend to select a multi family office in Europe, or want to discuss your wealth planning in general, we very much invite you to contact us. We look forward to helping you.


One of the wealth planning structures increasingly used by family offices for their clients is a professional investor fund in some jurisdictions also known as a specialised investment fund. A professional investor fund is a collective investment scheme only available to a limited number of sophisticated investors.


An investment fund, which cannot be distributed to retail clients investors who only hold relatively small amounts to invest or are not qualified to invest for other relevant reasons. It is only open to certain classes of well-informed (sophisticated) investors, like institutional and professional investors, and as the case may be wealthy individuals or families. As retail clients are not allowed to invest in the applicable regulatory requirements are generally less stringent than for investment vehicles aimed at retail clients.


The more substantial the minimal amount which investors need to invest the fewer regulations apply, as this category of investors is considered to be sufficiently knowledgeable and experienced so as to be able to weigh the risks and merits related to this type of investments.


Are offered out of several jurisdictions. Some of the better known jurisdictions for establishing this type of wealth planning structure are Ireland, Luxembourg, Malta and the United Kingdom, but they are, for example, also offered out of the Channel Islands. In some of these jurisdictions several types of, and are available depending on the overall wealth of the investors and on how intensely they are regulated, yet in some only a single type is available.

most jurisdictions the investors can decide for themselves which type of corporate vehicle they will use to establish, therefore take the form of i.e

  • an investment company
  • a unit trust or
  • a limited partnership

The preferred form and jurisdiction of the fund depend primarily on the fiscal regulations in the home country of the investors, the investment goals of the investors and other criteria.


Is a collective investment scheme, it is important that there are at least several participants. In the case of a family this is often easily arranged if not via the individual members of the family, then by creating several corporate structures which all invest in the same investment fund depending on the specifications and requirements of the investor(s). In order to establish, it will be necessary to file an application for authorisation of with the financial supervisory authorities of the jurisdiction of choice. Drafting of an offering memorandum might be necessary as part of the regulatory requirements. Depending on the jurisdiction of choice the whole process will in a normal case take between 2 to 6 months.

Where in the past wealth owners were often focussed on cost efficient offshore structures which were quick and easily established, we now see that affluent families and their family offices are primarily focussed on sustainable structures in onshore jurisdictions. The fact that PIFs are regulated is therefore considered as a main benefit.


Investment flexibility, compliance, tax deferral and privacy are important factors for wealth owners to take into account when investing. A PIF allows a combination of all those factors. A family office mostly sets up a PIF as a dedicated investment fund for one family. Individual members of the family invest in the fund, or else legal entities controlled by family members are acting on their behalf.


Where retail investment funds are bound by rules with respect to diversification and leverage, this does not apply to PIFs. The PIF can hold a wide range of investment classes, like private equity, alternatives, real estate and listed and non-listed securities, via one single fund or via several sub-funds. The PIF is in some jurisdictions also allowed to concentrate its investments in only one asset class.

A major advantage of the PIF is that the family office can decide on your behalf on the investment manager of the fund. Therefore, contrary to a normal investment fund, the family office is in full control of the investment strategy or could, under certain conditions act as the investment manager itself. As a result the PIF offers a lot of investment flexibility and can therefore also function for the family as a kind of family holding company.


A professionally established PIF can also protect the privacy of the wealth owners to a certain extent.


One of the other main benefits of a PIF is that the realised investment proceeds are usually completely exempt from corporate taxation in the jurisdiction where it was established. Returns realised at the level of the fund itself are therefore automatically net returns. In most jurisdictions the PIF can also distribute returns to the investors without any taxes being withheld.

Due to the fact that these types of investment funds are registered with and regulated by the financial services authorities in the jurisdiction of their establishment, they are in most other jurisdictions considered as ‘regular’ investment funds for personal taxation purposes. This means that in a considerable number of jurisdictions the fund will result in deferral of taxation for the investors till the moment that the fund actually distributes its profits to them*. As long as the returns on investments are re-invested within the PIF no taxation will take place at the individual level, depending on the investor’s jurisdiction.


A multi-family office in Europe which is strong in wealth planning will be able to support you with the establishment of a PIF as one of its family office services.

Do not hesitate to contact us when you want us to support you in finding the most appropriate multi-family office, would like to discuss the benefits of professional investor funds or other wealth planning structures, or when you feel we can support you in any other way.

* The tax consequences of a professional investor fund are different for every country.