Private Placement Life Insurance (PPLI) is gaining traction with family offices. When designed, implemented, and administered properly, PPLI is a marvel of long-term planning, offering benefits that can span generations. But like any enduring structure, the utility of a family's PPLI portfolio depends on the strength of its foundation, and the skill of the craftspeople who build and maintain it. Unfortunately, many family offices that are exploring the implementation of a PPLI portfolio devote the vast majority of their due diligence efforts to evaluating the product itself, while giving little attention to selection of professionals responsible for the PPLI portfolio's strategic design and ongoing stewardship.

To address this critical gap, I recommend an eight-part due diligence framework that enables family offices and their advisors to rigorously evaluate a life insurance brokerage firm’s ability to manage every stage of the PPLI process, from initial strategy through long-term oversight. Applying this framework moves the selection process beyond marketing narratives and establishes a disciplined, defensible methodology for choosing the right partners. The goal is not only to ensure that the PPLI portfolio is thoughtfully constructed but also that it is supported by the infrastructure, expertise, and governance necessary to perform as intended throughout the lifetimes of the insured family members.

1. Experience: Execution Over Theory

PPLI has long been regarded as one of the most sophisticated and effective tools for tax-efficient, intergenerational wealth transfer. However, its growing popularity has drawn a wave of new entrants to the market, including life insurance brokerage firms that have only recently shifted their focus to PPLI. Many now position themselves as experts, despite having limited experience with the structural, legal, and operational complexities that define this highly specialized domain. 

This distinction is critical. The skillset required to sell traditional life insurance does not automatically qualify an advisor or brokerage firm to design, implement, and administer a PPLI portfolio. Designing a structure that maximizes premium deposits while minimizing life insurance coverage is only the starting point. The real challenge lies in execution, where theory meets practice. Effective PPLI implementation requires fluency not only in life insurance but also in estate planning, tax law, and investment management. Key questions must be addressed: Who should be insured? Will they qualify for favorable medical and financial underwriting? Is the trust properly structured and domiciled in a favorable jurisdiction? Is the trust the right funding source for the premium deposits? And who is responsible for coordinating the efforts of the transaction principals, trustees, legal counsel, and insureds to ensure it all comes together in an optimized manner?

These and other questions represent critical operational challenges. And once the policy is in force, the need for professional guidance and service only increases. Administering a PPLI portfolio is labor-intensive and demands ongoing, detail-oriented oversight. This includes a range of service activities and reporting responsibilities, such as coordinating premium deposits (which may involve direction letters, wire transfers, and multiple confirmations); executing investment allocations, redemptions, and reallocations; monitoring investment performance, confirming the accuracy of policy charges, producing timely PPLI portfolio reporting, both policy-by-policy and consolidated; managing life insurance “net amount at risk” reductions; facilitating distributions; managing the payment of insurance proceeds; and providing the consultations and financial modeling required to enable sound decision-making. It also requires the life insurance brokerage firm to learn from prior experiences and to continuously adapt to evolving tax and regulatory environments.

In the world of PPLI, experience isn’t just a credential; it’s a safeguard. Because PPLI is not a one-time transaction but a long-term fiduciary commitment, it demands more than surface-level qualifications. Ask when the firm implemented its first PPLI policy. Ask when the individual advisor first led a PPLI engagement. Look for evidence of thought leadership—published articles, speaking engagements, or contributions to industry dialogue. These aren’t just résumé highlights; they’re proof of a track record built on real-world execution and enduring client outcomes.

2. Infrastructure: Orchestration versus Improvisation

A well-structured PPLI portfolio relies on a coordinated team of highly skilled professionals. These individuals must be proficient in financial modeling, income and estate tax planning, medical and financial underwriting, trust analysis, policy ownership structuring, and the structuring and administration of Insurance Dedicated Funds (IDFs) and Separately Managed Accounts (SMAs). They also manage the creation and execution of direction letters and, most critically, ensure timely and accurate policy reporting and administration. In short, PPLI is not a “set it and forget it” solution; it’s a dynamic investment-oriented insurance solution that demands continuous oversight and operational precision.

This becomes especially clear when considering tasks that may seem routine at first glance, such as reallocating assets from one Insurance-Dedicated Fund (IDF) to another. While simple in theory, these actions often involve a tightly coordinated sequence of steps across multiple parties, each requiring flawless execution to avoid delays or errors. Typically, the process includes:

1. Reviewing the current IDF’s liquidity terms, especially the notice period for redemptions.
2. Confirming the allocation acceptance timing of the new IDF.
3. Negotiating, if necessary, with the new IDF to ensure they will accept the allocation.
4. Drafting a direction letter from the trustee (or LLC manager) to the directed co-trustee (or LLC co-manager).
5. Obtaining the trustee’s (or LLC manager’s) signature on the direction letter.
6. Sending the direction letter to the directed co-trustee (or LLC co-manager).
7. Completing the life insurance company’s PPLI reallocation form.
8. Securing the directed co-trustee’s (or LLC co-manager’s) signature on the reallocation form.
9. Submitting the reallocation form to the life insurance company and confirming receipt.
10. Following up with the insurance company to ensure timely execution of the reallocation.
11. Obtaining a transaction confirmation once the reallocation is completed.
12. Sending the confirmation to the policy owner for their records.
13. Monitoring any audit holdback amount and ensure it is redeemed promptly.

Can a single individual or small team be relied upon to perform this type of administrative activity? Perhaps for a very small number of PPLI policies. Life insurance brokerage firms that enter the PPLI market are often surprised at how much work is required, and how thin the revenue margins are (especially compared to the traditional life insurance policies that they’re used to selling and servicing). If they sell enough PPLI policies, they will ultimately face a dilemma. They’ll have to build the necessary infrastructure to service them, which is expensive and requires patient capital to generate an adequate return, or else they’ll have to choose between: 1) betraying the trust of the clients who expected their PPLI portfolio to be administered effectively, or 2) outsourcing the administration of the PPLI portfolios (and a large portion of the PPLI policy administration revenue) to a life insurance brokerage firm that has already built the necessary infrastructure.

To determine whether a firm is truly equipped to manage PPLI portfolios, meet the team members and take their measure:

• Who is responsible for financial modeling and PPLI portfolio transaction design?
• Who is responsible for managing carrier relationships and negotiating the PPLI policy pricing and other policy terms?
• Who is responsible for the medical underwriting, financial underwriting, and other elements of the PPLI portfolio implementation process?
• Who is responsible for PPLI portfolio reporting and ongoing administrative services?
• Who is responsible for overseeing the firm’s operations?
• Who is responsible for managing the client relationship and for ensuring that the essential services are delivered in a timely manner, and on a consistent basis over time?

Additionally, in the ideal, there would be at least two professionals involved in the management of the client relationship, with each one capable of coordinating the effective delivery of the firm’s services. This approach establishes an institutional relationship between the family office and the brokerage firm, and it enables a multigenerational team to design and administer the PPLI portfolio to meet a client family’s expectations for many decades to come.

3. Independence: Full Access versus Limited Access to PPLI Policies

An insurance professional’s ability to access the full spectrum of available PPLI policies has a direct impact on the quality, flexibility, and long-term success of the solution delivered to the family office. Each life insurance company brings its own strengths and limitations, so selecting the right policy should be based on what best aligns with the family office’s long-term goals, not simply on cost. While lower-cost policies may be appropriate for those comfortable investing in insurer-approved IDFs or SMAs that pass a rigorous due diligence process, price alone may not be the deciding factor. In some cases, paying a modest premium for a higher-cost policy can provide significantly greater investment flexibility, creditor protection, and diversification. These advantages may ultimately justify the additional cost.

For family offices, the choice of life insurance companies can also affect underwriting outcomes, the clarity and timeliness of reporting, and the ease of making portfolio adjustments over time. These operational details may seem secondary, but they can have a meaningful impact on the family’s experience and outcomes. The goal isn’t to find the cheapest PPLI policy; it’s to construct a PPLI portfolio that best supports the family’s long-term objectives, values, and preferences. 

But even the most thoughtful PPLI portfolio design is only as strong as the advisor’s access to the market. Many PPLI advisors are owned by, or have an affiliation with, a distribution platform such as a wire house, private bank, Registered Investment Advisor (RIA) firm, or life insurance producer group such as M Financial, NFP (now an operating division of Aon), Lion Street (now owned by Integrity Marketing Group), and FFR. While these distribution platforms can provide scale, infrastructure, and support, they may also constrain the PPLI advisor from being able to access all the PPLI policies available in the market.

Moreover, some PPLI advisors have become mere conduits to a single life insurance company whose business model includes back-office services such as underwriting, implementation, and ongoing policy administration. This approach has obvious cost and quality consequences for the family office buyer, and for a structure as nuanced and enduring as PPLI, this level of constrained access isn’t just a limitation; it’s a potential conflict of interest.

Ask whether the firm has access to the full universe of PPLI policies. Ask what percentage of their clients’ policies and scheduled premium deposits were placed with each life insurance company, both in the current year and historically. Ask about the ownership of the PPLI brokerage firm and its affiliations. Most importantly, determine whether it is operating with true independence and a fiduciary mindset.

The answers may surprise you. And they matter, not just for structural flexibility, but for underwriting outcomes and pricing. Without access to the full market, the family you serve may receive less favorable underwriting offers, be subject to higher costs and/or less reliable service, or miss out on more efficient solutions.

4. Expertise: Mastery or Make-Believe?

The design of a PPLI portfolio is not a plug-and-play exercise. It’s a symphony of tax law, actuarial science, trust structuring, and investment strategy, each requiring deep fluency, not just familiarity. A true expert can walk the family and its professional advisor team through the range of PPLI policy structures that qualify for income tax preferences under IRC §7702, the Investor Control Doctrine and its implications for investing the PPLI premium deposits, the differences between Insurance-Dedicated Funds (IDFs) and Separately Managed Accounts (SMAs), the business models and market position of the life insurance companies that sell PPLI policies, the merits of acquiring PPLI onshore versus offshore, the PPLI policy fee components and their impact on investment returns, the impact of higher or lower investment returns on policy performance, the impact of volatility of investment returns, the incremental fees for policy loans, the nuances of Guideline Premium Test (GPT) versus Cash Value Accumulation Test (CVAT), the methods available for structuring the PPLI acquisition to optimize for multi-generational estate tax minimization, and many other key decision points.

This expertise reveals itself not in how persuasively a strategy is presented, but in how precisely it holds up under scrutiny. When a structure is intended to endure across generations, navigating evolving tax regimes, market cycles, and family dynamics, you don’t need a storyteller. You need an expert strategist: someone who can lead a multidisciplinary team with clarity and conviction, executing with consistency and care, year after year.

That’s why it’s essential to look beyond the pitch deck. Ask for specifics. Pressure-test the logic behind the recommendations. Request case studies and financial models that compare proposed PPLI structures to the status quo or other multigenerational planning strategies. Can the firm deliver this level of work? Can they clearly articulate the rationale behind their design choices—and the trade-offs a client must weigh?

5. Technology: Security, Task Management, and Reporting

Technology is no longer optional in PPLI administration; it’s foundational. The systems used to manage a PPLI portfolio must meet the same rigorous standards expected of single-family offices and institutional platforms. At a minimum, this includes robust privacy protections and adherence to SOC 2, Type 2 security audit standards. But beyond compliance, technology must be embraced as a core component of the service model, not just a back-office tool.

Firms that integrate automation and AI into their operations are better equipped to deliver the accuracy, consistency, and efficiency that PPLI demands. These tools excel at handling repetitive, rules-based tasks, such as transaction processing, data reconciliation, and reporting, freeing human professionals to focus on high-value, judgment-driven work. Over longer time horizons, this combination of precision and scalability becomes essential.

That said, technology alone isn’t enough. Human insight, particularly the ability to synthesize complex information with empathy and context, remains irreplaceable. The most effective PPLI brokerage firms will strike a deliberate balance between technological sophistication and personalized service, ensuring both operational excellence and a client experience grounded in trust.

When evaluating a firm’s readiness to support PPLI portfolios, it’s important to assess both the services offered and the technology that enables them. Ask:

• What systems support their service model?
• Can they demonstrate real-time, policy-level reporting capabilities?
• Do they offer consolidated views across multiple policies and insured family members?
• Is performance reporting available monthly, year-to-date, and since inception?
• Are all policy charges reflected in net-of-fee reporting?

Requesting a live demo can be especially revealing. These capabilities aren’t just conveniences; they’re essential for delivering the transparency, reliability, and long-term stewardship that family offices expect and deserve.

6. Governance: Built to Last or Built to Sell

The life insurance market has become an active arena for financial engineering, with private equity firms and strategic buyers on the hunt for acquisition candidates. Family offices that are considering the implementation of a PPLI portfolio need to determine if the brokerage firm is built to last or built to sell.

A private equity firm’s investment time horizon is generally less than 10 years, after which the PPLI brokerage firm will be sold to another private equity firm or to a strategic buyer. The private equity firm’s primary focus is the optimization of investment returns for its limited partners, not the delivery of services to one of its portfolio company’s PPLI clients.

A strategic buyer will have a longer investment time horizon, but its primary focus is the optimization of investment returns for its shareholders, which may or may not be achieved through the delivery of consistent high-quality service to the clients of one of its operating divisions. More concerning is that strategic buyers are often large, complex organizations with multiple business units, short-term performance pressures, shifting priorities, and frequently changing leadership teams.

Delivering consistent, high-quality service over the 30–70-year lifespan of a typical PPLI portfolio requires sustained investment in infrastructure, continuous professional development, and an unwavering commitment to client interests. In my view, the only governance model capable of meeting these demands is an employee-owned, multigenerational partnership. This structure aligns long-term economic incentives with service delivery by ensuring that those responsible for managing the portfolio also benefit from its success. It also creates a natural incentive for the current generation of life insurance professionals to invest in and mentor the next generation, preserving institutional knowledge and service continuity well into the future.

However, the development of an employee-owned, multigenerational partnership is not easy. It requires a deliberate commitment to long-term thinking and the discipline to delay gratification. Rather than focusing on the immediate financial rewards of a capital realization event, this model prioritizes the steady, long-term revenue that comes from consistently and effectively servicing PPLI policies over decades.

Such a structure demands the intentional grooming of next-generation leaders who can carry the mission forward. It also requires avoiding transactional decisions or ownership structures that could introduce risk or inconvenience for clients many years into the future. Continuous investment in infrastructure and technology is essential to ensure the firm can deliver the level of service clients expect over generations.

With that perspective, consider asking the following questions to assess whether a life insurance brokerage firm is truly structured to support a family office throughout the full lifespan of a PPLI portfolio: 

• What is the firm’s ownership and governance structure?
• Does it align with the long-term nature of a PPLI portfolio?
• Do the priorities of the firm’s owners support—or potentially conflict with—the priorities of its clients?
• Is the firm truly built for permanence?
• And if it isn’t, what happens if it fails to deliver on its promises?

7. Culture: The Invisible Architecture

Culture is the invisible architecture of a firm, the ideology that carries the firm into the future (for better or for worse). An ideal culture for a firm that services PPLI portfolios puts the client’s interests first, prioritizes consistent high-quality work above growth, promotes meritocracy, fosters internal collaboration, embraces the development of professional skill, cultivates future leaders, invests in innovation, and appreciates the relationships and the journey.

Watch out for incentive misalignment, a subtle but powerful force that can distort behavior. Ask how the team members are compensated. Ask if the team members compete with one another for business. Ask how strategic and tactical decisions are made, and who is involved in the process. Inquire whether the owners lead by example and embody the values they promote. It’s also valuable to seek input from non-leadership team members; their perspectives often reveal insights that aren’t visible on an organizational chart.

8. PPLI Pricing Dynamics: What Really Drives Cost and Value

One of the most commonly misunderstood elements in life insurance brokerage firm due diligence is pricing.

Unlike traditional retail life insurance policies, for which life insurance brokerage firms generally receive a large commission in policy year one, and much smaller commissions thereafter (if any), the brokerage firm revenue for a PPLI policy is generally transparent and structured as an asset-based fee. This distinction is important. PPLI is a thin margin product for the life insurance brokerage firm, and yet a PPLI policy demands a high level of upfront and ongoing professional service and requires the life insurance brokerage firm to develop both PPLI-specific expertise as well as operational depth and sophistication. This creates a natural tension between the economic reality of a thin-margin product and the high-touch service expectations of a family office, making it essential to assess whether the brokerage is truly equipped to deliver long-term value. In this context, unusually low fees may not be a measure of value, but rather an indication that the life insurance brokerage firm is lacking in experience, capability, or commitment.

It is not uncommon for life insurance professionals to assert that they “are paid by the life insurance company,” implying that the fee for their services has no impact on the policy pricing. This is not accurate. The pricing for a PPLI policy is comprised of: 1) elements that are determined by the life insurance company (the DAC Tax Fee, the Mortality Charge, and the life insurance company’s M&E Fee), 2) elements that are determined by the brokerage firms (the Structuring Fee, and the brokerage firm’s M&E Fee), and 3) an element that is dictated by the jurisdiction of the policy acquisition (the State Premium Tax). The life insurance company may be the paymaster, but the brokerage firm determines the fees for its services.

It is also not uncommon for life insurance professionals to emphasize one element of the PPLI policy pricing (e.g., the Mortality Charge) and ignore other elements that may partially or wholly offset that one element. PPLI pricing is the sum of the life insurance company elements, the life insurance brokerage firm elements, and the applicable State Premium Tax. Only when these three pricing elements are measured in total can the family office feel comfortable that they understand the pricing of one policy versus another. Moreover, any such comparison must align with other variables such as the age of the insured, the gender of the insured, the assumed risk classification, the premium deposit pattern, the assumed rate of investment return, and the assumed life expectancy of the insured.

The most effective way to compare the pricing of one policy versus another is to measure the difference between the assumed rate of investment return (net of investment management fees but before PPLI policy fees) and the illustrated internal rate of return on the PPLI Insurance Proceeds at and/or around the insured’s life expectancy. That difference will enable the family office to determine the annualized impact of the illustrated PPLI policy fees, and it will account for any manipulations of specific pricing elements.

Of course, the competitiveness of those illustrated outcomes is also shaped by who is advocating for the policy. Life insurance companies do offer better pricing and policy terms to certain brokerage firms, but this is influenced more by the volume and quality of recent new business than by the firm’s overall PPLI policy asset value. While life insurance companies will compete with one another to earn as much market share as possible with highly productive brokerage firms, their willingness to offer concessions depends on several factors: the clarity and completeness of application packages, the conversion rate of quotes to issued policies, and, most importantly, the brokerage firm’s conduct in the market. A firm’s reputation for professionalism, integrity, and respectful collaboration with life insurance companies plays a critical role in its ability to advocate effectively for clients. Companies are far more receptive to pricing flexibility when they trust the broker’s approach and see a history of constructive, good-faith engagement.

Final Thoughts: Due Diligence Matters

A PPLI portfolio is one of the most powerful tools in the ultra-high-net-worth estate planning arsenal, but only when it's designed and managed by professionals who understand its complexity, its longevity, and its purpose. This isn’t just about income and estate tax minimization. It’s about aligning the family office’s long-term vision with a structure that can endure across generations. 

That means asking uncomfortable questions, demanding transparency, and expecting to perform due diligence with the level of rigor that is appropriate for a structure that has a long duration and significant impact on the family’s multigenerational financial well-being. Because in the end, you’re not just buying a life insurance policy. You’re selecting a partner to help steward your legacy. And in that process, systems matter more than stories, data-driven precision will outlast persuasive charm, and governance and culture will determine whether promises made are promises kept.

The author wishes to express gratitude to Michael Liebeskind for his assistance with the preparation of this article.