What Are Segregated Funds?
Similar to mutual funds, segregated funds are market-based investments consisting of a pool of investments in securities such as stocks, bonds, or other securities. Segregated funds are insurable contracts, they have benefits that mutual funds do not.
Talk to with a Insurance Representative today to learn more about whether segregated funds are a good fit for your investment goals.
Maturity Guarantees
A segregated fund policy guarantees the value of your investments at maturity or on your death, will not be less than a specified percentage of the amount you invest.
Death Benefit Guarantees
Your beneficiary will receive the guaranteed amount or market value of your investments- whichever is higher. You can also control how they get the benefit, as a lump sum or in the form of a payout annuity.
Creditor Protection for Non-registered Accounts
Segregated funds may be protected against seizure by creditors. This can be of a particular benefit to business owners who are looking to protect against an unexpected lawsuit or bankruptcy. Consult your legal advisors for details.
Resets
The ability to lock in market gains on your investment.
Segregated vs. Mutual Funds
Segregated Funds |
Mutual Funds |
|---|---|
Life insurance contract, where money is pooled together with a large group of other policy owners |
Pooled investment in a trust or corporation |
You own an interest in the life insurance contract |
You own units of a mutual fund trust or shares of a mutual fund corporation |
Contract ends on the death of the contract purchaser |
Units/shares pass to estate or to named beneficiary of registered plan |
Can name beneficiaries for both registered and non-registered funds |
Cannot name beneficiaries for non-registered funds in Quebec |
Regulated by provincial insurance legislation |
Regulated by provincial securities legislation |
Potential creditor protection for registered and non-registered funds |
Potential creditor protection for registered accounts only |
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Libro Wealth Strategies is a program provided by Aviso Insurance Inc. offering financial planning, life insurance and investments to members of credit unions and their communities. Trade-mark(s) of Libro Wealth Strategies are used under licence by Aviso Insurance Inc. Any amount that is allocated to a segregated fund is invested at the risk of the contract holder and may increase or decrease in value.