1.   Insured bonds carry a pledge from a private backer to pay interest and principal on the bonds if the issuer defaults.

2.   Bond insurance normally guarantees interest payments only if the issuer defaults.

3.   Investors should consider buying insured muni bonds, which are backed by private companies if their issuers default on interest or principal payments.

4.   This is because the bonds guarantee a fixed income return unless the issuer defaults.