This looks exactly like a HYIP to me; I'd be pretty surprised if it turns out to be legitimate. I have purchased some PPT bonds, though. With the extra insurance, the odds of winning seems reasonable.
The insurance is a gimmick. Buying X bonds with 25% insurance at Y BTC each is equivalent to buying 0.75X uninsured bonds at (4Y/3 - 32/75) BTC each. This means that, all else being equal, buying X PPT bonds at more than 1.07 BTC each is dominated by investing 0.75X BTC in pirate at the same MPR.
The bonds in general are good for people who can't invest in Pirate at all, or too little to enjoy the higher interest rates; but assuming everyone is rational, the insurance shuffles some numbers around but it ultimately has no effect on who should buy them and what they gain for it.
Edit: Actually, I've neglected the time value of money in this calculation (which I think is fairly insignificant as far as BTCST investments are concerned). A more accurate decomposition is: Buying X bonds with 25% insurance at Y BTC is equivalent to buying 0.75X uninsured bonds at (4Y/3 - 32/(75(1+r))) BTC each
and investing 0.32X/(1+r) BTC in 100% insured bonds with a return of r. If there are no other investment opportunities and money has no time value, r=0 and we go back to the previous case.