Tax-Efficient Access to Alternative Investments: IDFs

Provide high-net-worth investors with tax-efficient access to an exclusive universe of private fund strategies.

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What is an Insurance Dedicated Fund (IDF)?

An IDF is an investment vehicle option available only to insurance policyholders/providers to comply with tax laws. IDFs are found on an insurance carrier’s private placement life insurance (PPLI) platform. IDFs within a PPLI allow qualified investors to access private funds and compound income and growth on a tax-deferred basis.

Exclusively for Qualified Purchasers

IDFs are available to qualified purchasers only through select insurance companies that offer private placement life insurance to policyholders. Each carrier offers a limited menu of IDFs approved on its platform. Investors and fund managers may work with insurance carriers to add new IDFs.

Investors typically work with their wealth advisor and specialized insurance broker to create a customized PPLI policy and personalized investment allocation consisting of a complement of IDFs that meet their specific goals and objectives.

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Tax-Deferred Growth for Private Alternatives

IDFs are designed for investors who would like to grow their assets on a tax-deferred basis by investing in a portfolio of private alternative strategies. Allocating to IDFs through an insurance carrier’s PPLI platform is one of the few means to accomplish such an objective today.

Most highly affluent investors considering PPLI are seeking to minimize taxable investment income while growing their wealth for future generations.

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Access to an Exclusive Investment Fund Universe

IDFs are a way to tax-efficiently diversify affluent client portfolios across a range of alternative investments. IDFs give investors access to a universe of over 200 private alternative fund strategies that can help improve portfolio diversification and risk-adjusted returns

IDF funds encompass a wide range of investment strategies and asset classes including opportunistic credit, long-short equity, quantitative trading, direct lending, private equity, real estate, cryptocurrencies, hedge funds-of-funds, and others.

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Resources and Insights

ADVISORS’ GUIDE

Harness the Power of Private Placement Life Insurance & Variable Annuities

Maximize wealth and enhance after-tax returns for affluent individuals and families

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How to Grow Wealth Tax-Deferred with Private Placement Life Insurance

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