Segregated funds are pools of money invested in stocks, bonds and Treasury Bills held solely for the benefit of its unit holders. Unique features of segregated funds include investment guarantees and creditor proof protection. Segregated funds are individual variable annuity contracts, which means they are governed by the law of the Insurance Act.
Guarantee of Principal
Segregated fund investments achieve capital gain potential just like mutual funds, but segregated funds also include features that guarantee your principal investment. This means that you are guaranteed a minimum of 75%-100% of your initial investment, even if the fair market value is lower. If the fair market value is higher, you will receive this amount. These guarantees typically come into effect after an investment period of ten years.
Death Benefit Guarantee
Since segregated funds are an insurance contract, the death benefit guaranteed is 75%-100% of your capital with no time restriction.
With a named beneficiary, your funds go directly to your beneficiary, and bypass probate fees.
You can periodically “lock in” the protection of the investment principal when the policy has increased in value. This resets your 10-year guarantee period.
> To get started on your Segregated Funds, speak with an experienced advisor at Torce Financial Group.