Segregated Funds

What are they?

A segregated fund is similar to a mutual fund but is issued by a life insurance company and is subject to the provisions of the provincial Insurance Act. The investments in the fund are usually managed either by the life insurance company or by an arm's length mutual fund company.

Who provides them?

Virtually all of Canada's major life insurance companies offer segregated funds.

 

Advantages

1. Normally, 100% of the principal amount invested is guaranteed at the death of the investor.
2. Normally, 75–100% of the principal amount invested is guaranteed 10 years after the investment is made.
3. In many cases, segregated funds offer protection from creditors (that is, they are immune from attachment) in the event the investor encounters financial difficulty.
4. Segregated funds by-pass probate, thereby saving significant time and probate and estate administration expenses.

 

Disadvantages

The management expense ratio is usually higher than that of a mutual fund; however, the above Advantages often outweigh the higher management expense ratio.

CONTACT US

ADDRESS

15 Wertheim Court, Suite 510

Richmond Hill, ON L4B 3H7

TELEPHONE

(416) 410-2332

FAX

(905) 707-5540

EMAIL

Arthur Standil: standil@invesmar.com

Shari Standil: sstandil@invesmar.com