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Segregated funds are individual insurance contracts that invest in one or more underlying assets. They provide a guarantee to protect part of the money you invest (75% to 100%). Even if the underlying fund loses money, you are guaranteed to get back some or all of your principal investment. Segregated Funds offer a direct way to pass your investments to family and other beneficiaries by bypassing delays, costs of probate, and estate fees.
Benefits
Segregated funds offer a variety of benefits to investors who are looking for more than just a rate of return. Similar to mutual funds in many ways, segregated funds can also provide the following advantages:
A fast, private, and direct way to pass your investments to family and other beneficiaries, bypassing delays and costs of probate and estate fees.
Protect your personal investments in the unforeseen event of bankruptcy
Guaranteed protection for part or all of your capital investment from market downturns
Reset feature gives you the opportunity to increase your maturity and death benefit guarantees and benefit from investment gains, with no surrender fees if you withdraw from the policy.
Possible RRSP Solution
Within an RRSP, Segregated Funds can help diversify your holdings, generate potentially higher returns, enable you to lock in your investment growth, and protect your retirement savings from the influence of market fluctuations.