Manning Financial

Investment bonds are life insurance policies where you invest a lump sum in a variety of available funds. Some investment bonds run for a fixed term, others have no set investment term. When you cash investment bonds in, how much you get back depends on how well – or how badly – the investment has done.

How investment bonds work

You invest a lump sum – the minimum is usually €10,000. Most investment bonds are whole of life. There is no minimum term, usually, although surrender penalties might apply in the early years. You have a choice of funds to invest the money into, depending on your attitude to risk. At surrender or on death (or if not a whole of life bond at the end of the term), a lump sum will be paid out. The amount depends on the bond’s terms and conditions and might depend on investment performance. Some investment bonds might guarantee your capital or your returns. These guarantees usually involve a counterparty. If so they carry the risk of counterparty failure.

Access to your money

You can usually withdraw some or all of your money whenever you need to, but a surrender penalty might apply if you do so in the first few years. Investment bonds also allow you to make regular withdrawals each year up to a specified limit.