When Insurance Policies were first launched, they were purely a risk mitigation tool. That meant that you pay a premium under an assumption that a particular asset ( it could even be you!) could be under the threat of an impending peril and hence the insurer would try to obliterate the risk by having it transferred onto himself. However, insurance companies had felt the need to provide transparency and flexibility to their policies and also see if they could beat inflation and see to it that their clients' money could grow at a healthy rate of interest. Hence came in Unit-linked Policies, Insurance Bonds or with-profit polices. These new breed of policies specified what percentage of the  premium went into the pure cover charges and what went into the investment part of the bond.The flexibility, the options and the transparency, notwithstanding the impeccable competency records in managing 'other people''s money' have all made these policies investment vehicles to reckon with.

An Insurance Bond is akin to a life assurance policy but with a single premium payment type, mostly used for purposes of investment. Insurance Bonds are usually issued by insurance companies and act as long-term saving instruments spanning across 10 years or so. Investors who had invested in such bonds for the specified time period of the Insurance Bond usually get their inflation-adjusted returns entirely tax-free. The extent of the taxes levied ( or not levied at all!) depends on the particular taxation laws of the country the insurance companies operate in.

The Insurance bonds are generally with-profit type policies and usually marketed as unit-linked policies too, where the Insurance Bonds have access to different type of invest vehicles that can be used depending on what kind of risk-appetite the customer has or the kind of of investments he wants his money to be invested in. The funds range all high-risk to low-risk investments - from equity to debt, with varying degrees of freedom in choosing the percentage allotments among them, in between. The Insurance Bonds are chosen by customers who are usually the long-term investing type but then, do not really have the capability to do adequate financial analysis to choose and pick their funds. Since these Bonds do everything for the retail investors for a price, it is deemed as a more convenient option.

Insurance bonds either provide growth in assets or a regular income at a later date. Different investors choose their options depending on their requirements and with the kind of flexibility, transparency and ease of monitoring your funds, thanks to the Internet and mobile media, they even have the option of backing out of a particular decision, they found their previous decision not-so-prudent.