A Bond is a credit that an investor makes
to a company, government, centralized agency, or other organization.
accordingly, bonds are sometimes referred to as debt securities.
because bond issuers recognize that you are not going to provide
your hard-earned money without reimbursement, the issuer of the
bond enters into a official Contract to pay you interest.
Bonds funds can be extremely helpful
to anyone concerned about capital preservation and income generation.
Bonds funds also can help to some extent to compensate the risk
that comes with equity investing. They can be used to achieve a
variety of investment objectives. Bonds funds hold so many opportunities.
Accepting bond fundamentals is important
to make Knowledgeable investment judgment about this investment
type. The additional you know at present, the less possible you
will be to make a decision you later be disappointed.
A bond is mostly
just a advance, but in the form of a security, even if terms used
is rather dissimilar. The issuer is equivalent to the borrower,
the bond holder to the lender, and the coupon to the interest. Bonds
enable the issuer to finance long-term investment with external
funds.
A bond fund is a collective
investment scheme that invests in bonds and other debt securities.
Bond funds yield monthly dividends that include interest payments
on the fund's underlying securities plus any capital appreciation
in the prices of the portfolio's bonds. Bond funds tend to pay higher
dividends than CDs and money market accounts, and they generally
pay out dividends more frequently and regularly than individual
bonds.
Traditionally insurance bonds
were with-profits policies and were often called with-profit bonds.
Since the introduction of unitised insurance funds they have often
been marketed as unit-linked bonds or investment bonds.
History of insurance
In some sense we can say that insurance
appears simultaneously with appearance of human society. We know
of two types of economies in human societies: money economies .
The second type is a more ancient form than the first. In such an
economy and community, we can see insurance in the form of people
helping each other. For example, if a house burns down, the members
of the community help build a new one. Should the same thing happen
to one's neighbour, the other neighbours must help. Otherwise, neighbours
will not receive help in the future. This type of insurance has
survived to the present day in some countries where modern money
economy with its financial instruments is not widespread .
Insurance, in law and economics,
is a form of risk management primarily used to hedge against the
risk of a contingent loss. Insurance is defined as the equitable
transfer of the risk of a potential loss, from one entity to another,
in exchange for a premium. Insurer, in economics, is the company
that sells the insurance. Insurance rate is a factor used to determine
the amount, called the premium, to be charged for a certain amount
of insurance coverage. |