Segregated funds are insurance contracts that offer an alternative to mutual funds. Legally known as "individual variable insurance contracts", they are 'fund-based' like mutual funds. They also come equipped with a guarantee. At least 75%, and in some case more than 100%, of the initial investment is guaranteed upon the maturity of the contract or the death of the planholder, regardless of what the funds are worth on the market at the time.

You get the full potential for growth and the comforting protection of a guarantee.

Life insurance companies often partner with mutual fund or money management companies in offering these funds. The partnerships are structured so the money management company handles the investing of the money and the administration of the contracts and the insurance company issues the contracts and provides all the guarantees that are associated with them.

Key Benefits

• Guarantees on your money
• Reset option; the ability to lock in your investment gains
• Creditor protection
• No probate fees

Segregated Fund Benefits

• Peace of mind: With the segregated fund guarantee investors can usually choose between a 75% or 100% guarantee of their deposit (less withdrawals) on maturity of the contract (10 years) or death.
• Lock in Gains: Most companies allow you to lock in your gains twice a year at no cost. Upon the reset, the guaranteed amount is increased to the new market value of your investment and a new 10-year period begins.
• Creditor proof capacity: Segregated funds offer the potential to protect your assets against creditors, when a preferred beneficiay is named.
• Estate planning benefit: When a beneficiary is name, the proceeds of your policy are no longer part of your estate. This allows you to avoid delays by legal reviews, as well as costly probate fees.
• Consumer Protection: The Canadian life and Health Insurance Compensation Corporations protects Canadian policy holders, within limits, from loss of policy benefits in the event of the insolvency of a Life Insurance company.