A segregated fund is an investment fund that you hold within an insurance contract. The term “segregated” refers to the fact that your investment is separated from the general assets of the insurance company. Segregated funds are similar to mutual funds in many respects, but provide many additional features and benefits.

Guarantees that are common to every segregated fund contract include a death benefit guarantee and a maturity guarantee. The death benefit guarantee protects a specific percentage of the value of an investment upon the death of the contract annuitant. The maturity guarantee protects a percentage of the value of an investment at the end of a specified term (typically 10 years).

Segregated funds also offer the ability to bypass probate. In the event of the death of the annuitant, the proceeds of an insurance contract pass directly to a named beneficiary without going through probate. This allows for the asset to avoid probate and estate administration fees. Furthermore, the beneficiary will also receive the proceeds without extended delay -- a considerable benefit during a time of need.

There is also the potential for creditor protection. In general, when the beneficiary is a parent, child, grandchild or spouse of the annuitant (for Quebec, ascendants and descendants of the owner), and the contract wasn't set up for the purpose of avoiding creditors, segregated fund assets may be protected from creditors. This is a benefit to all small business owners, professionals, and entrepreneurs who want a cost-effective means of ensuring their personal financial assets are not subject to professional liability.

Our team chooses from the following segregated fund companies:

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