Insurance companies collect large sums of money some of which is used for investment purposes.
Unit Linked
These are policies where the values of the policy are linked to the investment performance.
Under the traditional type of policy the insurer invested premiums as they saw fit without the policy holder having a hand in the investment. Now under a unit linked policy, the policy holder may have a choice on where the funds are invested. This is to say the policy owner links the unit of his premiums to a fund of his choice. The sum assured payable on death or maturity will depend on the returns from the investments.
Bond Investment
Unlike an annuity, an investment bond is an investment vehicle that guarantees income payment monthly or annually or accumulates the interest in order to make a cash payment at the end of the term. In both cases terms of one to five years are common. The bond may be linked to some of the shares, property or cash fund operated by the insurer.