Segregated Funds
What is a Segregated Fund?
Segregated Fund is an investment vehicle that offers investment growth and life insurance benefits. A large pool of money is invested in stocks, bonds, real estate, or other securities with the goal of growing the entire pool.
Why invest in a Segregated Fund?
Secured Deposit
At maturity, up to 75% of your deposit is insured.
At death, 100% of your deposits made before age 85 and 75% of deposits made at age 85 or over are insured.
Death Benefit Guarantee
Segregated funds ensure that your money is insured even if the market value of the fund goes to zero; thereby providing financial security to the beneficiary regardless of the market’s performance.
What are the features of a segregated fund?
Segregated funds are only available as investments within a segregated fund contract. They are insurance contracts and have higher fees due to the guarantees and benefits that are offered that mutual funds do not have. The following are examples of benefits that come with a segregated fund:
Avoid Wills Variation Act
○ Proceeds go directly to the named beneficiary without being contested or altered by the courts.
Maturity Guarantee
○ The guarantee provides a level of security for the investor's principal investment, protecting investors from significant losses while allowing them to participate in potential market gains.
Probate Fee Bypass
○ Save on probate fees
○ Probate: the legal process of validating a will and distributing the deceased’s assets.
Privacy
○ Proceeds are paid directly to the named beneficiary and do not go through the public probate process
○ Details of the investment and distribution remain private and will not be on public record
Quick Proceeds Disbursement at Death
○ Beneficiaries receive the funds faster
Non-registered Successor Annuitant
○ Transition does not trigger an immediate taxable event
Estate Fee Reduction
○ Preserves more of the estate’s value for the beneficiaries
Potential Creditor Protection
Death Benefit Guarantee
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