What are segregated funds?

Canada Life - Oct 27, 2023
Segregated fund policies give you the freedom to invest while offering insurance protection to preserve your savings
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Investing is a fundamental part of financial planning. While there are lots of options, one option you may be considering is segregated funds. Segregated fund policies give you the freedom to invest while offering insurance protection to preserve your savings. With choices of guarantees, you can expand your wealth and secure it at the same time.    

What are segregated funds? 

They’re different than mutual funds. Segregated funds invest in a variety of stocks and bonds. They offer unique protection features only available through insurance companies. They’re a great way to save for your retirement and investment goals. 

How do segregated funds work? 

In a nutshell, a segregated fund is a pool of money spread across different investments. It’s managed by experts and helps you diversify your savings and protect them from dips in the market. Depending on how much you’re looking to invest, there’s lots of choices with different fee designs. 

Benefits of investing in segregated funds 

  • Guaranteed savings protection: You can pick between two guarantees from Canada Life for your investment: 75% or 100% of the amount invested. This choice helps make sure your savings stay safe. Here’s how it works: when your investment reaches its maturity date or when you die, if your investment is worth less than its guaranteed value, the insurance protection will top you up. It’ll be proportionally reduced by any withdrawals. 
  • Diverse portfolio: Invest in one of the widest selections of segregated funds in Canada. These funds are managed by award-winning investment managers. I can help you make your choice based on your comfort with risk and financial goals. 
  • Potential creditor protection: Your investments could be protected even if you face unexpected lawsuits or bankruptcy. With such protection, after your death, the death benefit will go to your beneficiaries, not creditors.* 
  • Privacy: Your designated beneficiaries (if you decide to have them) are a private matter and won’t be disclosed.** 

I’m here to support you with finding the right solution for you 

Let’s chat about whether segregated funds are a suitable investment for you. It’ll depend on your financial goals, risk tolerance and individual circumstances.  

*Creditor protection depends on court decisions and applicable legislation, which can be subject to change and can vary from each province; it can never be guaranteed. Talk to your lawyer to find out more about the potential for creditor protection for your specific situation. 

**In Saskatchewan, executors must disclose all known life insurance policies owned by the deceased, including segregated fund policies. They must list the insurance company, policy number, designated beneficiaries and the value at the date of death.