Insurance bonds keep coming up in Noel's writing lately — and in the August issue of Noel News, he finally sits down and explains exactly how they work.
If you've seen the term "insurance bond" and moved on because it sounded like something your grandparents owned, this section of the newsletter is worth your time. Noel Whittaker walks through the mechanics, and they're surprisingly simple. An insurance bond is an investment — shares, fixed interest, cash, your choice — held inside a structure where the fund pays tax of 30 per cent on earnings as it goes. You never declare a cent in your tax return, and there's no annual capital gains tax (CGT) paperwork.
The magic number is ten. Hold the bond for ten years and you can cash it in without paying any further tax. Need the money earlier? You can take it — the money is never locked away like superannuation — and you receive a 30 per cent rebate on the tax paid on profits.
For readers in their 40s and 50s, Noel points to three uses. If you've used up your super contribution caps, bonds have no contribution limits. If you want to invest for a goal that arrives before you can touch super, bonds stay accessible. And for estate planning, a bond with nominated beneficiaries passes outside your will and probate — with none of the death tax of up to 17 per cent that can apply when super goes to adult children.
His case studies put numbers on it: "Sarah" ends up almost $25,000 better off over ten years using a bond instead of a cash account, and almost $59,000 better off using the bond's Australian shares option.
"If you hold the bond for 10 years it can be redeemed tax-free."
Read the full article: Noel News — August 2026 (insurance bonds) — Noel Whittaker, Noel News, August 2026.
Thinking about building wealth outside super? Noel's classic Making Money Made Simple (26th Edition) covers investing fundamentals in the same plain English — buy direct from the author for $16.99, delivered instantly as PDF and EPUB, updated for the current financial year.