Segregated Funds & Estate Planning

srgregated fund

Why recommend segregated funds?

Anyone, regardless of age, who is building a nest egg or saving for retirement can potentially have their savings negatively impacted by three major risks:

  • Market Volatility
    People feel confident about their investments in a strong market. But when the market turns downward, emotions tend to run high. Any market drops in the years leading up to, or at the retirement stage, can have a devastating impact on a financial future.
    This worry has many Canadians looking for retirement vehicles that will not only position their investments for growth when markets are up, but also have the potential to protect their capital when markets drop.
  • Inflation
    Inflation can undermine a portfolio’s purchasing power over the long term. It can be determined by the fact that how $100 spent on a ‘basket of goods’ in 1986 inflates over time. After 30 years of inflation, the cost almost doubles. It’s important to build a financial plan that offers opportunity for growth.
  • Longevity
    Better healthcare, medical breakthroughs, and safer workplaces all contribute to longer lifetimes. This means people retiring today may be looking forward to a retirement of three or more decades — almost as long as the working phase of their lives. It’s important to have a plan that is designed to help build sufficient wealth to provide income for a long retirement.

Turn to guarantees and other advantages designed to promote peace of mind

Segregated Fund contracts can be an important component of a diversified portfolio. In addition to access to growth potential of the markets, investors may take comfort in knowing they can benefit from the following value-added features:

  • Maturity Guarantee
  • Payout Benefit Guarantee
  • Death Benefit Guarantee
  • Guaranteed Income for Life
  • Resets
  • Creditor Protection

Keep in mind: Estate planning advantages

When it comes to estate planning, you can take steps now to help ensure that your loved ones will not endure additional stress during a difficult time.

Segregated fund solutions offer the ability to name a beneficiary. When a beneficiary other than your estate is named, the money goes directly to your beneficiary. Your loved ones can receive an inheritance quickly and privately. You may even be able to leave your heirs more than you would with other types of investment products.

Key estate planning advantages of segregated funds:

    • Speed
      Settling an estate can be lengthy, frequently taking months or even years if the will is challenged. With a named beneficiary other than the estate, death benefit proceeds of a segregated fund contract can pass directly to the beneficiary and avoid delays.
    • Cost
      Legal, estate administration, and probate erode the value of an estate, diminishing the amount of money beneficiaries receive. The proceeds of a segregated fund contract can bypass these fees.
    • Privacy
      Bypassing the estate, and therefore probate where applicable, can preserve confidentiality as probate is a matter of public record. Payments made to named beneficiaries of an insurance contract do not flow through the estate and are therefore a private matter.
    • Control
      Use the Annuity Settlement Option to automatically transfer segregated fund proceeds upon death into an annuity. Replace a lump sum benefit with smaller, scheduled payments while providing savings of legal, estate administration and probate fees, increased privacy and potential creditor protection.

    We’ve got you covered

    Find a solution that reflects your goals, life stage and investment style. The breadth of segregated fund product shelf is unparalleled in the industry. Choose from a variety of solutions designed to offer:

    • Growth Potential
      Exposure to the markets means your wealth has potential to grow.
    • Peace of Mind
      Built-in maturity and death benefit guarantees are designed to help mitigate your investment’s exposure to market fluctuations.
    • Potential Creditor Protection
      You may be able to protect personal assets from professional liability.
    • Guaranteed Income for Life
      Some segregated fund contracts include an option that can deliver lifetime guaranteed income. Ask your advisor for details.