PPLI structure and parties: policy owner, life assured, beneficiary, insurer, custodian bank and asset manager

Private placement life insurance (PPLI) involves six parties. The policy owner, the life assured, the beneficiary and the insurer form the insurance contract itself; the custodian bank and the asset manager sit outside the contract and are responsible, respectively, for safekeeping the assets under a custody agreement and for managing them under an investment mandate. What sets PPLI apart from ordinary life insurance is that the policy value does not depend on the insurer's general account or a public fund, but on an investment account set up solely for that policy and run by a manager the owner nominates. Working out who answers to whom is the starting point for understanding fees, tax, carrier jurisdiction and how the policy fits with a trust.

Two layers and six roles

A PPLI policy can be split into two layers. The protection layer is the insurance contract: the insurer undertakes to pay a death benefit, calculated by the contractual formula, when the life assured dies. The investment account layer is a custodied account opened for that policy alone. The market value of the assets in it makes up the account value; fees are deducted from it, and withdrawals and surrender values are calculated from it.

Beyond the six parties, lawyers (ownership structure and beneficiary arrangements), tax advisers (characterisation in the place of tax residence), trustees (where a trust holds the policy) and licensed financial adviser representatives (product explanation and suitability assessment) are not part of the policy structure, but each comes in at a particular stage of the process; see Application process.

Policy owner: who owns the policy and who bears the investment risk

The owner holds the property rights in the policy and may be an individual, a trustee of a trust, a company or a family office entity. In every case the owner must meet the investor eligibility requirements (in Singapore, being an Accredited Investor who has expressly opted in; see Minimums and fees) and pass due diligence on source of funds and tax residence. The owner bears all investment risk: the account value is not guaranteed and may fall below premiums paid, and further funding is needed if the account value or cash allocation runs short. Some products allow joint owners; what happens to one owner's interest on death is governed by the policy terms.

Life assured and beneficiary: whose life triggers the payout, and who receives it

Under section 146 of the Insurance Act 1966, the person taking out the policy must have an insurable interest in the life assured; the presumptions for relationships such as spouse and child are as set out in the statute. The life assured is commonly the owner, the owner's spouse or the next generation. Some products allow several lives assured with the benefit payable on the last death, so that the policy can run across generations. Adding or replacing a life assured is a contract change that requires the insurer's underwriting and acceptance and may lead to the cost of insurance being recalculated.

On the beneficiary side there is a structural constraint specific to Singapore. The LIA's guide to nominating beneficiaries (March 2026 edition) states that a trust nomination or a revocable nomination may be made only where the policy owner is also the life assured and is at least 18; a trust nomination may name only a spouse and/or children and cannot be changed unilaterally; and a revocable nomination is automatically revoked when the policy is assigned. It follows that a PPLI policy owned by a trust or company cannot use the nomination regime: the beneficiary arrangement has to be written into the trust deed or a company resolution. An individually owned policy where the owner is not the life assured cannot use nomination either. Nomination and trust ownership cannot be combined, and the choice has to be made at the structuring stage.

Insurer: issues, underwrites and charges, but gives no investment advice

The insurer reviews investor eligibility and the opt-in declaration, source of funds, insurable interest, medical or financial underwriting, whether the assets to be transferred are on its acceptable list, whether the custodian and manager qualify, and whether the mandate and any changes to it fall within permitted limits. It gives no investment advice, takes no responsibility for the mandate's results and does not guarantee the account value. Problems at the custodian, the manager or an asset issuer are third-party risks borne by the owner, subject to the policy terms.

The insurer has to keep the final say for both regulatory and tax-characterisation reasons (the investor-control rules; see Asset contribution and investment managers).

Under either formula the benefit is payable only if the policy is in force and the policy conditions are met, net of amounts owed and charges due; the formula, any additional cover and the exclusions are set by the product summary and policy contract. According to an industry interview (Hubbis, 18 March 2025, secondary source), Swiss Life describes the PPLI death benefit as the value of the underlying portfolio plus limited additional death cover, which matches the first form; this is not a description of any particular product.

Custodian bank and asset manager: whose name the assets are in, and who places the orders

The custodian bank opens a segregated account for the policy. The assets are held in the name of the insurer (or its designated custody structure) and booked separately from the insurer's own assets. The legal arrangements differ across the three jurisdictions. MAS has explained that licensed life insurers in Singapore must maintain statutory insurance funds under the Insurance Act (including investment-linked funds), and that these funds are segregated from head-office and shareholders' funds (MAS, 16 September 2008). Luxembourg requires the assets representing insurance liabilities to be deposited with a custodian under a custody agreement approved by the CAA (ACA, 25 February 2019). In Bermuda, counterparties of a segregated accounts company have no recourse to the assets of other segregated accounts or the general account (SAC Act 2000, s 11(4)). Details for each jurisdiction are on Carriers. None of these mechanisms or regulatory statuses amounts to a guarantee of policy value by any government or regulator.

The asset manager, once the insurer has completed due diligence and accepted it, signs a management agreement and investment mandate with the insurer (not with the owner), makes investment decisions within the mandate and sends instructions to the custodian. A mandate typically sets eligible asset classes, concentration limits, minimum credit ratings and a minimum cash allocation; the actual parameters are set by the insurer's mandate documents. The owner can choose the type of mandate at a strategic level and propose a change of manager, but cannot place orders directly or bypass the manager to instruct the custodian to buy or sell.

Changes: replacing the manager, adding or removing lives assured, assignment and surrender

Every change requires the insurer's review and acceptance and may trigger charges or re-underwriting. With the six-party relationship clear, the next step is how assets enter the structure and where fees are deducted: see Asset contribution and investment managers and Minimums and fees. If you would like this applied to your own circumstances, you can register your enquiry through the contact details on this site.