A cutting tool has an insert holder with an indexable cutting insert removably secured therein. The cutting insert has upper and lower end surfaces with a peripheral side surface and a through bore extending therebetween, and a plurality of upper cutting edges formed on an upper peripheral edge. The peripheral side surface includes a non-circular upper relief surface adjacent the upper peripheral edge and a circular upper abutment surface spaced apart from the upper peripheral edge. Each upper cutting edge exhibits mirror symmetry about a bisector plane, and is non-linear in a side view. The through bore has an inner undercut formed by upper and lower bore surfaces located on opposite sides of a median plane, and a clamping member makes contact with one of the upper and lower bore surfaces at an inner contact zone located between the median plane and a seat surface of the insert holder.