If an L Bond is anything like the old Showtime show The L Word, it involves the lives and loves of bonds that are attracted to other bonds.
Sadly for the ratings of The L Bonds TV show that we at Shmoop briefly had in production, the term actually refers to a kind of debt security.
If you have certain types of life insurance, you can sell your insurance on a secondary market. Basically, the buyer becomes the beneficiary...meaning that some stranger is out there waiting for you to die so they can cash in.
A company called GWG Holdings makes a business of buying up these contracts and issuing bonds backed by the benefits. These are the L bonds..."L" standing for "life insurance."
The bonds have relatively high yields compared to other bonds with similar maturities. However, the market for them isn't very liquid. Once you have one, they may be difficult to sell.