Segregated Funds: Secure Investment Growth with Added Protection
Planning for the future requires investment solutions that balance growth potential with financial security. Segregated funds offer a unique investment opportunity that combines the benefits of mutual funds with the added protection of an insurance contract.
Whether building wealth, planning for retirement, or looking for estate advantages, segregated funds provide peace of mind and financial stability.
What Are Segregated Funds?
Segregated funds are investment funds offered through insurance contracts, making them different from traditional mutual funds.
They allow for market participation while providing guaranteed protection on a portion of the investment, making them an attractive option for those seeking both growth and security.
These funds invest in a diversified portfolio of assets, similar to mutual funds, but with the added advantage of maturity and death benefit guarantees, potential creditor protection, and estate planning benefits.
Key Benefits of Segregated Funds
1. Capital Protection with Guarantees
One of the standout features of segregated funds is the maturity and death benefit guarantees. Depending on the contract, a percentage of the initial investment (typically 75% to 100%) is guaranteed, even if market conditions decline.
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Maturity Guarantee: At the contract’s maturity date (usually 10–15 years), investors are assured a minimum value, regardless of market fluctuations.
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Death Benefit Guarantee: In the event of the investor’s passing, beneficiaries receive the guaranteed amount or the current market value—whichever is higher.
2. Potential for Market Growth
While offering protection, segregated funds also allow participation in market gains. Since they invest in diversified portfolios of stocks, bonds, and other assets, investors benefit from long-term growth potential while mitigating downside risks.
3. Bypass Probate for Estate Planning
With segregated funds, assets can be passed directly to beneficiaries without going through probate. This ensures a faster and more cost-effective estate transfer, making them a valuable tool for estate planning.
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Avoid probate fees and delays
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Privacy—no public record of the transfer
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Efficient distribution to beneficiaries
4. Potential Creditor Protection
For business owners and professionals, segregated funds may offer protection from creditors. If a named beneficiary qualifies as a family class beneficiary (spouse, child, parent, or grandchild), the investment may be safeguarded from legal claims and creditors.
5. Reset Options for Added Flexibility
Some segregated fund contracts allow resets, meaning the guaranteed amount can be adjusted upward if the market value of the fund increases. This feature locks in growth, ensuring long-term financial security.
6. Tax Efficiency
Segregated funds can offer tax advantages, particularly for non-registered investments. Since they are structured as insurance contracts, they may allow for tax-deferred growth and potential tax savings upon withdrawal.
Who Should Consider Segregated Funds?
Segregated funds are ideal for individuals who want:
✔ Market growth with downside protection
✔ Estate planning benefits and bypassing probate
✔ Security and stability in uncertain markets
✔ Potential creditor protection for business owners
✔ Tax-efficient investment strategies
Explore Segregated Fund Options
Investing in segregated funds provides a balanced approach to wealth management, combining growth potential with insurance protection.
Whether planning for retirement, securing an estate, or looking for a tax-efficient investment, segregated funds offer a unique blend of security and opportunity.
For those seeking financial growth with built-in protection, exploring segregated funds can be a smart and strategic decision.
CONTACT US
ADDRESS
6D – 7398 Yonge Street, Suite 202
Thornhill, ON L4J 8J2
TELEPHONE
FAX
(905) 707-5540
Arthur Standil: standil@invesmar.com
Shari Standil: sstandil@invesmar.com
Macey Standil: mstandil@invesmar.com
