a) What are Segregated Funds?

Segregated funds are similar to mutual funds, but are offered through or sponsored by insurance companies. Like mutual funds, they offer investors the ability to “grow” their investment capital, provide access to professional fund management, and allow investors to diversify amongst various managers and fund types.

b) How Does a Segregated Fund Work?

When you invest in a segregated fund you are purchasing an insurance contract, not fund units. The assets are owned by the insurance company, but kept separate or “segregated” from its other assets. Segregated funds are the actual investment options provided under these contracts. They may be invested in stocks, bonds, cash investments, or mutual funds. They are liquid and can be redeemed at any time.

c) What Do Segregated Funds Offer that Mutual Funds Do Not?

.. A Guaranteed “Maturity” Value
There are guarantees available on your principle investment at the tenth anniversary of the contract. This guarantee can be rolled out to further 10-year periods to lock up higher fund values.

.. A Guaranteed “Death” Value
There are guarantees available on your principal investment at the time of death.

.. Avoid Probate Fees by Paying Proceeds Directly to a Named Beneficiary
By naming specific beneficiaries in the preferred class, you have the ability to avoid probate fees and can have the benefits paid directly to the named beneficiaries.

.. Limited Creditor Protection
Limited creditor protection can be available if a family member is named as beneficiary.

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