Insurance Bond

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DEFINITION of 'Insurance Bond'

An investment instrument that is offered by life insurance companies. The investment is provided in the form of a single premium life insurance policy. These bonds are often used as investments in the U.K. and other countries.

Also known as an "investment bond".

INVESTOPEDIA EXPLAINS 'Insurance Bond'

Insurance bonds are very simple investments that allow investors to save for the long term. Investors who hold their bonds for more than 10 years without making any withdrawals in that time are able to receive their earnings tax free.

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RELATED FAQS
  1. Why some insurance policies are more expensive than others?

    There are several reasons that an insurance policy can cost more or less at different agencies. Some of the more common reasons ... Read Full Answer >>
  2. Why should I keep track of my insurance policy?

    The number one thing to remember about insurance is that, just like everything else, it changes over time. The top-of-the-line ... Read Full Answer >>
  3. Should I be worried about my insurance company?

    Yes, policyholders should always take a serious look at the financial stability of their current insurance company especially ... Read Full Answer >>
  4. How does the combined ratio measure the financial health of insurance companies?

    The combined ratio measures the profitability of an insurance company by examining its earned premium from its policyholders ... Read Full Answer >>
  5. What is the difference between adverse selection and moral hazard?

    In economics, moral hazard and adverse selection are two possible consequences of asymmetric information or ineffective information ... Read Full Answer >>
  6. Which markets are most prone to market failure from adverse selection?

    Adverse selection causes market failure -- a sub-optimal level of beneficial trades -- whenever material information cannot ... Read Full Answer >>
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