Interesting article in today’s Wall Street Journal:  Insuring Against Hedge-Fund Taxes; "Private Placement" Policies Draw More Wealthy Investors Despite Fees, Limited Control, by Rachel Emma Silverman:

A small but growing number of wealthy investors have discovered a legal way to invest in hedge funds without paying income taxes on the gains. It’s called "private placement" life insurance. These special insurance contracts allow policyholders to invest in a wide range of products, including hedge funds. The main attraction: Because the investments are held within an insurance wrapper, gains inside the policy are shielded from income taxes — as is the payout upon death. What’s more, policyholders may be able to access their money during their lifetimes by withdrawing or borrowing funds, tax-free, from the policy, depending on how it’s set up.

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