Benefits of segregated funds
Guarantee on principal investment
We know that investment returns are important, but so is your financial security. After all, nobody wants to lose money. With segregated funds you can reduce the effects of losses associated with market fluctuations because your principal investment, as well as any additional deposits, have a guarantee.
Leave a legacy to your family
After someone dies, their estate may be subject to probate or legal validation of the will. Probate and estate administration fees can be as much as 1.5% of the estate in some provinces. During probate, assets are frozen and the will is public property for all to view.
When you name a beneficiary, you bypass probate and save up to 1.5% of your assets. You also relieve your family of the potential burden of a lengthy and complicated process involving lawyers and government red tape just to access funds.
Protection from creditors
When you name a family member as a beneficiary, you have potential creditor protection in the case of unforeseen bankruptcy or litigation. This makes segregated funds especially attractive to a small business owner.
You have the option of converting your accumulated funds into a lifetime annuity, which would guarantee you an income for as long as you live.