Investments

What Are Segregated Funds And What Are Their Benefits?

Segregated funds offer the growth potential of mutual funds, but they provide distinct protective features only available through an Insurance company. The scope of protection options offered through Segregated Funds provides an ideal financial planning tool designed to help grow and protect your wealth. The overall value of these funds is unparalleled in the industry and offers benefits such as:

  • Death benefit and Maturity guarantees, which can help to protect your principal investment and help preserve generational family wealth.
  • A Guaranteed Minimum Withdrawal Benefit- that can offer predictable, sustainable, and potentially increasing retirement income for life.
  • The ability to bypass probate and estate fees- saving your beneficiaries valuable time and money. Case in point, a non-registered G.I.C from a Bank or Credit Union could cost your beneficiary approximately $ 3000.00 in probate fees, whereas a G.I.C with an Insurance company has the ability to bypass this fee.
  • A choice of reset options- to potentially increase your guarantee values.
  • Potential creditor protection- to help protect your personal assets from professional liability.
  • The ability to switch between funds and fund managers within each segregated fund family and free of charge with these benefits in mind multiple times a year.
  • In a non-registered environment Segregated funds have the ability to be taxed as a Capital gain- the lowest form of tax payable in Canada. Segregated funds also report taxable gains and losses yearly instead of redemption like Mutual funds and other equity investments, thereby buffering the tax consequences over time.

It is easy to see how Segregated funds have many distinct advantages and can help provide investment protection for every phase of your life.