Ultra-high-net-worth families protecting significant crypto gains often turn to Private Placement Life Insurance (PPLI), but a lot of people default into the wrong version of it simply because they don’t realize there are two distinct structures with different capabilities.
Part of our guide: Retirement Planning.
Domestic PPLI: Simple, But Limited to the US
Domestic PPLI is issued by US carriers and works well for US citizens whose investment and custody goals stay within the United States. Assets are managed and held domestically, under US jurisdiction, which keeps things straightforward if that’s all you need. The limitation shows up the moment your goals extend beyond US borders: domestic PPLI doesn’t offer international custody or foreign currency diversification within the policy.
Offshore PPLI: More Flexibility, More Complexity
Offshore PPLI is issued through international carriers and offers the same underlying tax treatment, with meaningfully more flexibility. It allows international custody, meaning assets can be held with providers in jurisdictions like Switzerland or elsewhere in Europe, alongside whatever US-based management you already have in place. It also allows multi-jurisdiction structuring, where a trust sits in one jurisdiction, custody in another, and management in a third, and foreign currency diversification, letting a policyholder hold exposure to currencies like the yen or euro inside the structure itself, an option domestic PPLI simply doesn’t provide.
The Investor Control Rule Applies to Both
One constraint holds regardless of which structure you choose: the investor control rule prevents the policyholder from directly managing the assets inside the policy. A qualified investment manager has to do that. This matters in practice when someone already has one firm managing a substantial crypto position and wants a second pocket of assets held and managed separately, in a different jurisdiction, for geographic diversification. Offshore PPLI makes that kind of split arrangement possible; domestic PPLI keeps everything under one US-based umbrella.
There’s No Universally Better Option
Neither structure is objectively superior; they serve different goals. If you’re a US person with US-only custody and management needs, domestic PPLI is straightforward and does the job. If you have international family, want custody diversified outside the US, or believe in currency diversification the way you might already believe in asset diversification, offshore PPLI is the structure built for that. The mistake isn’t picking one over the other. It’s not realizing there was a choice to make before the structure was already locked in, since unwinding and restructuring after the fact is far more complicated than choosing correctly the first time. Anyone considering either route should work with a consultant who specializes in PPLI structuring and can map the choice to actual goals, not just default to whichever version is easiest to set up first.
Educational only, not tax, legal, or investment advice. Check primary sources and speak with a qualified professional before making financial decisions.
