is an insurance policy a financial instruments 
insurance policies are not considered securities but they could be viewed as an alternative type of financial instrument because they confer a claim and certain rights to the policyholder and obligations to the insurer an insurance policy is a legally binding contract established with the insurance company and policy owner that provides monetary benefits if certain conditions are met such as death in the case of life insurance if the insurer is a mutual company the policy may also confer ownership and a claim to dividends insurance policies also have a specified value in terms of both the death benefit and living benefits e g cash value for permanent policies the bottom linea financial instrument is effectively a monetary contract real or virtual that confers a right or claim against some counterparty in the form of a payment checks bearer instruments equity ownership or dividends stocks debt bonds loans deposit accounts currency forex or derivatives futures forwards options and swaps financial instruments can be categorized by asset class and as cash based securities or derivatives depending on their type financial instruments may be exchangeable on listed or over the counter markets 