Segregated Funds
Segregated funds are investment products that combine the growth potential of mutual funds with insurance guarantees. These products offer capital protection (typically 75-100% guarantee after a specified period), estate planning benefits, and potential market returns, making them an attractive option for risk-averse investors.
Who It's For
- Investors seeking capital guarantees
- Those wanting market growth with downside protection
- People planning for estate needs
- Risk-averse investors
- Individuals seeking creditor protection
What It Covers
- Investment fund options (equity, fixed income, balanced)
- Capital guarantee (typically 75-100%)
- Death benefit guarantee
- Estate planning benefits
- Creditor protection (in some provinces)
- Potential market-linked returns
- Tax-deferred growth
- Maturity guarantees
Key Benefits
- Capital protection guarantees
- Death benefit guarantee to beneficiaries
- Potential for market-linked returns
- Creditor protection benefits
- Estate planning advantages
- Bypass probate in many cases
- Lock-in features to protect gains
- Diversified investment options
Common Questions & Answers
Are segregated funds just expensive mutual funds?
Segregated funds have higher fees than traditional mutual funds due to the insurance guarantees and benefits. However, the guarantees, creditor protection, and estate planning benefits can provide significant value that may justify the higher costs, especially for risk-averse investors or those with estate planning needs.
What if the market does well — do I still get the guarantee?
Yes! You get the better of the guaranteed amount or the market value. If your investments perform well, you receive the market value. If they decline, you're protected by the guarantee. You participate in market upside while having downside protection.
How does creditor protection work?
In many provinces, segregated funds have creditor protection when you name a beneficiary, meaning creditors generally can't access these funds. This can be valuable for business owners or professionals with liability exposure. Laws vary by province, and our agents can explain how this applies in your situation.
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