An investment bond is a type of life insurance policy that allows individuals to invest a lump sum of money in a range of funds or assets. The investment bond is issued by an insurance company and is a long-term investment, typically with a minimum investment period of five years.

Investment bonds offer several benefits, including the potential for tax-efficient returns. The investment income and capital gains generated by the bond are not subject to income tax or capital gains tax until the bond is cashed in or surrendered. When the bond is cashed in, the investor will be subject to income tax on the gain, which can be reduced by the use of available tax allowances and reliefs.

Investment bonds can be either single premium bonds, where a lump sum is invested upfront, or regular premium bonds, where regular payments are made into the bond. The investor can usually choose from a range of investment options, including funds investing in equities, bonds, or a mix of different asset classes.

It is important to note that investment bonds can be complex, and the fees and charges associated with them can vary considerably. Before investing in an investment bond, individuals should seek professional financial advice to ensure it is suitable for their needs and to fully understand the associated costs and risks.