Investment Bonds are a type of long-term investment vehicle offered by insurance companies and financial institutions, primarily designed for wealth accumulation, tax planning, and financial protection.
These products combine elements of life insurance with investment options, offering investors the potential for capital growth alongside certain tax advantages.
Investment Bonds are essentially life insurance policies that allow policyholders to invest a lump sum in a range of underlying assets, such as stocks, bonds, or mutual funds.
The value of the investment can appreciate over time, and the policyholder can benefit from the investment returns while also having life insurance cover.
Investment Bonds are distinct from conventional bonds as they are not just debt instruments but also hybrid products involving insurance.
Investment Bonds can be classified into various types based on their structure and investment strategy:
There are four main features of Investment Bonds:
There are four main risks of investing in Investment Bonds:
When comparing Investment Bonds, consider the following criteria:
Investors can access Investment Bonds through:
Minimum investments vary by provider but are typically between $5,000 and $10,000.
Not necessarily. They may be more suitable for long-term investors seeking tax-efficient investment returns.
Withdrawals may incur charges and tax liabilities depending on regulations.
Tax treatment can depend on whether gains are realised or remain within the policy. Investors should consult with a tax expert before making any assumptions.
Yes, many Investment Bonds allow policyholders to switch between different investment options.
Most Investment Bonds come with a cooling-off period (typically between 15-30 days) during which investors can withdraw without penalty.
The insurance component will pay out the bond’s value to beneficiaries.
Yes. Many providers allow additional investments, particularly with regular premium bonds.
Some regulations, such as lock-in periods, can limit investors’ access to their funds.
Cancellation procedures vary, but typically, a written request to the insurer is required.
Investment Bonds offer a combination of investment growth and life insurance benefits, making them an appealing choice for long-term financial planning.
Understanding the various types, features, and risks is crucial for potential investors.
By comparing products thoughtfully and being aware of frequently asked questions, investors can make informed decisions. While Investment Bonds can provide significant tax advantages, they require careful consideration of individual financial goals and circumstances.
Take control of assets within super. Build a diversified portfolio enabled by smart technology to manage super, transition to retirement or pension portfolios.
The Fund is designed for investors who are seeking strong medium to long-term capital growth potential, coupled with an increasing income stream payable from the dividends of the underlying shares.
The KeyInvest Funeral Bond is a tax-effective way to ensure funds are available for your loved ones to carry out your funeral wishes.
The Fund is a diversified, style unaware portfolio invested in a mix of asset classes mainly via managed funds, including other Equity Trustee funds.
The KeyInvest Life Events Bond is a low-cost and tax-effective investment bond designed to assist with building and managing wealth through every stage of life.
Futurity Education Bonds are designed for you to tax-effectively save and invest to fund your educational aspirations for you and your family. The flexible structure gives you full control and access to your funds at any time.
