A segregated fund is a professionally managed investment fund maintained by a life insurance company that offers estate and wealth protection.

Advantages

Financial guarantees. Segregated fund contracts guarantee a minimum 75% of the principal amount providing that no withdrawals are made. Upon death of the owner or maturity of the contract (usually 10 years from the date purchased) the beneficiary is guaranteed either the current market value or the principal invested - whichever is greater.

The reset feature. This feature allows the contract holder to "restart" the guarantee or maturity period and lock in some of the gains. Canada Customs and Revenue Agency does not currently consider the locking in of the fund with a reset to be a deemed disposition, so no capital gains tax is payable.

Estate planning. Upon your death, fund proceeds will bypass probate and go directly to your beneficiaries. However, your estate is taxed on any applicable gains.

To learn more about segregated funds, please contact a life-licensed Investment Advisor or ask a life-licensed Investment Advisor to contact you.