Segregated Funds

Segregated Funds – A Closer Look

As investors become more concerned about managing risk in their portfolios and protecting their principal, Segregated Funds, with their guarantees and unique estate planning features are more in demand.

Segregated Funds can give you the growth potential of Investment Funds with the security of insurance guarantees.  There are several benefits to this type of product but I would like to focus on 3.

The 1st Focused Feature is the Death Benefit Guarantee.  A Segregated Fund can offer up to 100% death benefit guarantee on your original deposit.  This means no matter how the market performs your investment has downside protection versus any premature passing.  

Here’s a quick example – You invest $100,000 in Non-Registered Funds and there is a 20% downturn in the market when you prematurely pass away.  Assuming you had no deposits or withdrawals your balance would be $80,000 at the time of that premature passing then your Estate or named beneficiary would receive $100,000 of your Non-Registered Investments, not the market value of $80,000.

The 2nd Focused Feature is the Resetting Guarantee.  Let’s use the same example of an original deposit of $100,000.  If you made that deposit on September 1st and on September 1st exactly 1 year later the market value was now $105,000, your death benefit guarantee would automatically reset to $105,000.

The 3rd Focused Feature is the Ability to Bypass Probate.  As long as you name a beneficiary rather than your estate the balance will be paid directly to those individuals, allowing your beneficiaries to receive the proceeds faster and privately.

Like I mentioned, there are several features and a couple of moving parts to a Segregated Fund.  

Please consult your Advisor to see if they are the right product for your Investment Portfolio.

At Newton Financial, we insure, to ensure, your Family is secure.

Jay Newton BA, CLU, CHS, EPC
Wealth Advisor
Newton Financial
Worldsource Financial Management Inc.

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