Turn investment income into tax-free income

If you have a large amount of investment income, your tax burden can be from a low of $42.4% to as high as 53.4%. With a PPVA investment account a wealthy client (Jim) can put after-tax dollars to work in a tax-deferred account.  With a private placement variable universal life insurance (PPLI), you put after-tax dollars to work in the form of an insurance premium. 

"Tax-free" always has a nice ring to it. The higher the income tax rate the nicer the ring. The old top rate, at 35%, was bad enough. The current highest rate — 39.6% — has created a flurry of activity to legally avoid the tax.

But wait! There is an additional surtax that can bite you for another 3.8% on passive investment income. And there can be more: your home state may have an income tax. Some states (like

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