Investment Bonds
What are Investment Bonds?
Investment bonds are offered by life assurance companies and are used to invest one-off lump sum payments. They allow access to a number of funds such as:
- With Profits funds
- Distribution funds
- Property funds,
- life companies own internal unit linked funds.
Many investment bonds now offer a greater range of investment through external links to unit trust/ OEIC funds.
Although they are classed as life assurance policies they will only have a minimal amount of life cover – i.e. 101% of the policy value at death. One of the benefits is that they allow tax deferral on withdrawals from the policy and can be used in effective tax planning, particularly for higher rate taxpayers.