Segregated Funds

Simply speaking segregated funds appear to be similar to mutual funds.

Looking more closely at the product we see they are actually an insurance product with a death benefit payable to a designated beneficiary. The annuity payments are deferred to a finite point in the future as defined by regulation unless the owner makes earlier election, and the amount of the payment will not usually be defined until a later date.

While the management fee for a segregated fund will often be marginally higher than a similar mutual fund they offer some significant comparative benefits including:

• A guarantee of return of premium under certain circumstances
• When specific criteria are met - creditor protection
• A beneficiary designation which clearly bypasses the estate of the insured