At maturity of the policy (or death) investors (or their beneficiaries) are guaranteed to receive from 70% to 100% of the principal invested, or the market value of the funds, whichever is higher. See the section below, “Why do fund management fees matter?” for more details. Similarities: What’s so special about Segregated Funds & why do many sophisticated Investors prefer them over Mutual Funds? However, whilst segregated funds can be effectively employed to protect assets from creditors, there are some important provisos, including: Segregated funds in a non-bankruptcy situation may not provide creditor protection from CRA income tax liabilities. Another reason people choose segregated funds is because they offer creditor protection. • If you are approaching retirement or like the security of guarantees and want creditor protection, you may want to purchase segregated funds. They usually do not come with the insurance guarantee, nor do they charge such high fees, though they do offer the potential for creditor protection and the possibility of excluding probate fees where applicable. This is due to the guarantee that these funds provide. Most segregated funds offer a guaranteed payout of at least 75% to 100% of the premiums paid, which is an advantage over standard mutual funds … |, Mortgage Insurance vs. You get more benefits, but that also means segregated funds may cost more than mutual funds. 4 Footnote 4 You will often pay higher management fees for segregated funds compared with mutual funds, due to the added insurance and protection that they offer. They usually do not come with the insurance guarantee, nor do they charge such high fees, though they do offer the potential for creditor protection and the possibility of excluding probate fees where applicable. A seg fund usually has a higher MER than a mutual fund, partly to cover the fund’s insurance features. Mutual funds are investment vehicles that many investors have embraced as a simple and relatively inexpensive method for investing in a variety of assets. But by offering the strategies in a seg-fund wrapper, RBC Insurance also gives investors the opportunity to access protective benefits such as a minimum 10-year maturity guarantee, a death benefit guarantee, estate planning benefits such as by-passing probate and potential creditor protection. Privacy For a TFSA, the above will occur unless a successor holder has been named, in which case the successor holder becomes the new owner of the TFSA & its contents. Policyowners can reduce the chance of others finding out who the beneficiaries are & the amounts of the proceeds given. Some segregated funds restrict the number of transfers. These guarantees are offered through various Life Insurance carriers that we represent and the bonuses/Income credits are based on a fixed & or variable rate of return depending on interest rates (Approx. Segregated funds differ from mutual funds, however, in that they have a built-in guarantee for either all or part of your investment, potentially offering a more secure option. What do Segregated Funds offer 3. Segregated funds are on the rise, reflecting the increasing recognition of the tangible benefits they offer investors. A segregated fund offers the investor fund choices such as equity funds, bond funds, balanced funds and money market funds, etc. The insurance protection advantage The notable advantage is that some segregated funds offer to insure up to 75% or higher, of the principal invested in a segregated fund if held for a number of years, typically 10. 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