Insurance bonds are back in favour as new entrants and old providers are returning with updated products and expansive investment menus, said Ross Higgins, Austock managing director.

Higgins was speaking at the fourth installment of Financial Standard's Technical Services Forum in Sydney yesterday.

With insights from some of the top technical minds working in the industry, the Forum looked at some of the benefits of insurance bonds, including estate planning, aged care and tax.

Higgins said on many occasions insurance bonds are a sound estate planning vehicle as they distribute tax-free on a death maturity at any time and they can be structured to outlive the bond owner.

The structure of insurance bonds also provides the next best tax advantage to super, Higgins said, adding that they can also assist in reducing the cost of aged care.

"Insurance bonds for many clients can be superior to superannuation, private trusts, testamentary trusts and it is superior to holding investment through a private company."

In the 1980s, insurance bonds were a huge investment vehicle, but in the 1990s they lost favour, said James Proctor, Rainmaker Group head of technical services.

According to Higgins, the insurance bonds lost favour because the providers AMP, AXA, MLC didn't innovate with them and the interest rate environment was fairly low around that time as well.

Today, the total funds invested through insurance bonds are estimated at between $7bn and $10bn, he said.

Approximately 20 practicing technical services managers from companies such as MLC, Challenger, CommInsure and Perpetual attended the forum.

The FS Technical Services Forum is held every quarter, with the next event on August 2.