At AJ Insurance Services, we offer numerous investment and savings opportunities in Segregated Funds. Whether you are looking at an RRSP (Registered Retirement Savings Plan) or non-registered savings plan, we can help you get started. It is never too early to begin saving. Statistics show that more Canadians are spending their hard-earned income on debt, rather saving for their future.
What are Segregated Funds?
Segregated Funds (or seg funds) are basically the insurance industry’s version of mutual funds. Like mutual funds, Segregated funds are pooled investments where the investor deposits money with a professional fund manager in return for units of the fund. However, there are a few key benefits to owning Segregated funds, that you can’t get with mutual funds.
Benefits of Investing in Segregated Funds
Segregated funds are technically insurance products, and therefore, must offer insurance protection in the form of guarantees. There are two types of guarantees: a guarantee at maturity and a guarantee at death. (75-100% guarantee on your principal) Mutual Funds do not offer these same guarantees
In most cases, creditors cannot touch your investments in Segregated Funds, as they are basically a form of life insurance, and have a named beneficiary.
Because Segregated Funds are considered a ‘Life Insurance contract’, they do not pass through probate. It is very re-assuring for investors to know that their savings will pass directly to his loved ones.
Resets – Investing in Segregated funds allow you to re-set your principal when you have realized a gain on your investments. For example: if you invested $5,000 and had a gain of $500, depending on the company you deal with, you can re-set your new principal at $5,500. (and your are now guaranteed not to lose that gain). Every insurance company has different rules with regards to re-sets, and it is important to know what those rules are.