More advisers are recommending insurance bonds to clients, but many still need to learn about the products’ role, according to Austock Life Head of Product and Relationships Richard Atkinson.

“Late last year we were seeing 20 new advisers a month writing insurance bond business with us,” he told insuranceNEWS.com.au. “But awareness of the role of insurance bonds is still an issue with advisers.”

Austock has noted advisers combining insurance bonds with annuities to provide full access to funds.

“A disadvantage with guaranteed products such as annuities is the lack of flexibility, because your money is tied up,” Mr Atkinson said.

“If the client needs a hip replacement or wants to pay for a child’s wedding, too bad.

Insurance bonds are emerging as a solution for nervous retirees who want an income-stream solution that provides a guaranteed income as well as full access to their funds.”

He says advisers’ increasing interest in annuities is helping insurance bonds make a comeback, but many advisers are still not making the association.

“I don’t think annuities are the sole reason why bonds are making a comeback,” Mr Atkinson said. “Advisers are looking for alternative strategies with retirement clients, and that is probably a driving factor in the growth of bonds again.”

The latest volatility in sharemarkets and retirees’ growing life spans are other drivers towards products that offer guaranteed, steady income streams.

“The insurance bond has been a forgotten investment product that is starting to re-emerge among advisers. Money is slowly moving back in to this highly flexible tax structure.

“But addressing the awareness [of bonds] with advisers is still the challenge for us.”