Segregated Funds

Essentially, these are mutual funds (investment funds which hold within them a basket of many different companies shares) with built in benefits which are unique to an insurance investment platform such as:

• These funds are creditor protected in the event of a bankruptcy or consumer proposal.

• These funds are probate protected in terms of being exempt from probate taxes when settling estates.

• These funds offer the choice of both maturity and death benefit guarantees which means that either 75-100% of the initial deposited amount of funds is guaranteed upon the person’s death or for a maturity guarantee, that same percentage is available upon the maturity date of the investment contract which is usually 10, 15, or 20 years from the inception date.

• These funds offer a variety of different platforms which in turn come with different management expense ratios. This means that there is a wide assortment of fund combinations which vary with respect to the sector that the funds are invested in. Some funds might be heavily invested in US stocks, others in Canadian stocks and yet others in bonds or GICs. Each fund has its own MER fee, which is known as a management expense ratio. This is the management cost attached to the fund which the institution charges to oversee and manage the fund for its investors. The range in these MERs could be from 0.88—4.25% depending on the fund and the company.