An investment option - with guarantees, estate benefits, and creditor and liability protection
Most investors are familiar with mutual funds, but they may be missing out on guarantees, benefits, and protection offered by segregated (“seg”) funds. Like mutual funds, seg funds are pooled investments offering growth potential in industry-leading funds. However, because seg funds are considered insurance products, they can include key advantages — unavailable to mutual funds — such as the following.
Guarantees on original investments AND on market gains
Seg funds include guarantees (75% or 100%) on your original investment. At investment maturity, you will receive (minus any withdrawals) the guaranteed value — regardless of market fluctuations — or the current investment value, whichever is higher.
You may also lock in your gains periodically. As your investment grows, you can lock in the new total (making it your new guaranteed amount).
Estate planning benefits
Seg funds allow money to flow to your named beneficiary without passing through your estate. This means:
The amount of funds your beneficiary receives may be greater. Proceeds from your seg fund contract won’t be reduced by the often substantial legal, administration, and probate fees associated with settling an estate.
Your named beneficiary will likely receive proceeds quicker. Lengthy delays — often months or even years — endured to settle an estate can be avoided.
The death benefit proceeds of seg funds offer potential protection from estate creditors and will challenges.
Confidentiality can be maintained. Because proceeds of your seg fund contract don’t flow through your estate, they’re a private matter.
Creditor and liability protection
Your assets within a seg fund policy may be protected from creditors when a certain beneficiary (such as a spouse or a child) has been named.
Upon your death, your seg fund assets may be passed to your beneficiary without exposure to creditors.
Seg fund policies also could reduce exposure to liabilities. Assets you hold in a seg fund may be protected if a lawsuit is filed against you.
Creditor and liability protection can make seg funds an excellent choice for business owners.
For full details on seg funds, and to determine if they’re appropriate for your wealth management plan, contact Don by email at don@bydandwm.ca or by phone at 250.881.7600.