Planning Ahead: Invest in Your Future with Segregated Funds

With so many different investment options out there, sometimes it can be difficult to wrap your head around the ones that are best to address your future financial goals. Sometimes investing itself can just feel like too much work, or involve too much risk, and so you avoid it altogether. If you want to invest in the future, an excellent solution is: segregated funds.

What are segregated funds? A segregated fund is an investment sold only by insurance companies that combines the growth potential of a mutual fund with the security of a life insurance policy. The life insurance company owns the segregated fund, but is required to keep it completely separate from all other assets – therefore protecting you. The value of segregated funds can fluctuate depending on changing market values, but, unlike other types of investments, segregated funds offer you guaranteed return on principal.

There are several benefits to investing in segregated funds. These include:

–       Segregated funds have maturity dates – This means that if you invest in a segregated fund and hold it until maturity (15 years for example), you are guaranteed to get money back – either the greater of the net investment or the current value (whichever is greater). Takes away the worry over risks, doesn’t it?

–       Segregated funds are guaranteed at death, the guarantee being either 75% or 100% of deposits or fair market value, whichever is higher, which means that even if you pass away, your beneficiary can benefit from your investments.

–       Segregated funds offer the ability to bypass probate and keep all of your financial affairs private. This saves your loved ones the added stress of having to deal with these issues upon your death that can often arise with other types of investments, as well as the added cost.

–       Segregated funds lower risk because you have the option of locking in market gains – and not just at the beginning of the fund. This can significantly increase the value of your segregated funds.

–       Segregated funds can be protected against creditors in the event that you suffer severe financial troubles in the future (however unlikely that may seem) because they are held as a contract with your insurance company.

–       Segregated funds are considered trusts in the eyes of the tax man, so a fund will allocate all taxable income and capital gains to investors. This means that you avoid having income taxed inside the fund at the highest marginal rate.

No matter your investment plans – whether you are planning for retirement or just want to try and make some financial gains for the future – it is important to understand the benefits of any type of investment. Segregated funds represent an important option for all types of individuals looking to invest, especially those hesitant about taking the risk.

For more information about the many benefits of segregated funds, please contact Gary Mandel at Independent Financial Concepts Group at 416-849-1653 or visit

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