Private Placement Life Insurance LLC Services

The power of South Dakota’s low insurance premium tax.

Along with providing trust and fiduciary services to our clients, Bridgeford Trust Company offers specialized solutions in tax planning and asset protection. Among these solutions is the opportunity to purchase Private Placement Life Insurance (PPLI) within an LLC created and managed by Bridgeford Trust Company, taking advantage of South Dakota’s insurance premium tax, the lowest in the U.S. at 8 basis points.

This approach highlights the importance of selecting the best U.S. trust jurisdiction during the tax planning process and provides a streamlined way to access South Dakota’s low insurance premium tax through the use of a South Dakota limited liability company (LLC), while also incorporating South Dakota’s progressive, cutting-edge trust laws into the structure.

Planning Advantages

Benefits of a Private Placement Life Insurance LLC

Our Private Placement Life Insurance LLC (PPLI LLC) service is particularly beneficial for individuals residing outside of South Dakota, as it enables them to take advantage of the state’s low insurance premium tax rates, which can lead to considerable tax savings compared to the higher rates they might face in their home states or jurisdictions. Bridgeford’s family of companies is able to offer this unique planning opportunity, overseeing LLC creation in partnership with a South Dakota attorney and serving as a manager or co-manager for PPLI LLCs, while ensuring our clients receive the full benefits of South Dakota’s insurance premium tax advantages.

Why Choose South Dakota for Your PPLI LLC?

Significant Tax Savings

Unlike other states that can charge up to 250 basis points in insurance premium taxes, South Dakota has the lowest state premium tax rate in the nation—8 basis points for premiums in excess of $100,000, as well as for trusts.

The state in which the insurance policy applicant is a resident, domiciled, or sitused imposes the applicable state premium tax, so when the insurance policy is purchased by a South Dakota LLC or trust, the insured’s resident state will not impose a premium tax on the premium paid for the life insurance policy purchased by a South Dakota trust or South Dakota LLC (assuming structured correctly). This difference can translate into substantial savings.

Robust Legal Framework

South Dakota has the benefit, along with premium taxation, of advantageous and comprehensive supporting law. Per South Dakota statute, retaliatory taxation does not apply to “the portion of a life insurance policy’s annual premiums exceeding one hundred thousand dollars.” (SDCL § 58-6-70)

South Dakota’s laws provide a sturdy legal foundation that supports PPLI transactions, ensuring your assets are managed within a framework designed for protection and growth.

Questions About PPLI LLC Services?

If you would like to learn more about our PPLI LLC services or discuss establishing a South Dakota Private Placement Life Insurance LLC, reach out to us through our contact form or call us at (605) 224-9189.