What are Segregated Funds?
Segregated funds are investment funds that pool together the assets of investors like you with similar objectives who want to:
- diversify their investments;
- reduce their risk and;
- lower their investment costs.
Like mutual funds, segregated funds are professionally managed, come with a variety of payment options and can be easily tracked in the media.
The Canadian Life & Health Insurance Association (CLHIA) has produced an excellent guide on segregated funds that you may find informative, http://www.clhia.ca/e7_2.htm.
Guarantees
If you buy a traditional mutual fund, there are no guarantees: you could possibly lose everything. Empire Life for example have guarantees no less than 75% of your net funds invested* at maturity and 100% if you die.
*Net funds invested are your total deposits minus any withdrawals on a proportional basis that are made to/from the segregated funds
What is a Maturity Date?
Your maturity date is the date your maturity guarantee is payable.
Maturity Guarantee
Maturity guarantees available vary from company to company most offer 75% or 100%. Please contact us for more details.
Death Benefit Guarantee
If you die, your beneficiary or estate is guaranteed a return of 100% of your net funds. Unless a successor annuitant has been appointed.
Resetting Your Guarantee
On most contracts you can reset your Maturity and Death Benefit Guarantee which will lock in the growth on your assets.
Creditor Protection
If you name your spouse, child, parent or grandchild as the beneficiary of your investments, or if you name an irrevocable beneficiary, your Segregated Funds may be protected from seizure by creditors. This is an important benefit to professionals and small business owners or anyone who could be involved in a lawsuit or bankruptcy.
