{"id":379,"date":"2013-08-24T00:31:22","date_gmt":"2013-08-24T04:31:22","guid":{"rendered":"http:\/\/andrewwbradley.ca\/Blog\/?p=379"},"modified":"2013-08-24T00:31:22","modified_gmt":"2013-08-24T04:31:22","slug":"what-are-segregated-funds-and-why-should-you-use-them","status":"publish","type":"post","link":"https:\/\/blog.andrewwbradley.ca\/index.php\/2013\/08\/24\/what-are-segregated-funds-and-why-should-you-use-them\/","title":{"rendered":"What are segregated funds and why should you use them?"},"content":{"rendered":"

\"What<\/a>
\nSeg funds vs Mutual funds
\nSegregated funds\u00a0are an annuity issued by an insurance company. They are\u00a0 similar to a mutual fund except for the fact that they come with capital or\u00a0 income guarantees as well as other substantial benefits. The term segregated\u00a0 means the issuing company must keep the premiums separated from other funds they\u00a0 are holding.
\nLike mutual funds “seg” funds have various fee options such as Deferred\u00a0 Service Charges (Back End fees that usually decrease over time), Low load and\u00a0 Front End Load fees. Typically the MERs (Management Expense Ratios) are slightly\u00a0 higher than the equivalent mutual fund to cover the companies risk in offering\u00a0 the guarantees. Some issuing companies also offer automatic re-balancing\u00a0 services.<\/p>\n

Some of the benefits of segregated funds<\/h3>\n

\u2022 Maturity benefit guarantees- At the maturity date of the contract a\u00a0 specified percentage of the premium is guaranteed to the account holder. Usually\u00a0 75-100%. In other words if the market plummets just before your maturity date\u00a0 you will be guaranteed 75-100% of your premiums back even if the market value is\u00a0 zero. This essentially limits your risk to 25% of your capital where as in a\u00a0 mutual fund the risk is 100%.
\n\u2022 Death benefit guarantees- At the death of the account holder a specified\u00a0 percentage of the premium is guaranteed to the beneficiary regardless of the\u00a0 market value of the account, unless of course the market value is higher. This\u00a0 would be a great advantage if you are using a leveraged strategy especially if\u00a0 you chose the 100% death benefit option. Your entire loan would be covered\u00a0 regardless of the market value of the account at the time. A definite advantage\u00a0 from your beneficiaries point of view.
\n\u2022 You can name a beneficiary.
\n\u2022 Proceeds from a death claim are treated like an insurance policy. They\u00a0 by-pass the estate and go directly to the named beneficiary there by side\u00a0 stepping probate and estate fees. Since the proceeds go directly to the\u00a0 beneficiary you have the advantage of increased privacy and control over your\u00a0 estate.
\n\u2022 They have potential creditor protection.
\n\u2022 They now have an option of providing guaranteed income for life. This\u00a0 feature can provide an income bonus if you defer the start date of your\u00a0 retirement withdrawals. The withdrawal benefit can increase with age.
\nAs with any portfolio you should diversify your assets through a range of\u00a0 investments and products. I believe the estate planning benefits of segregated funds\u00a0make them worthy of being an important part of your plan.
\nAndrew W Bradley<\/b><\/a> is a licensed Insurance Broker and Financial Services Advisor helping Orleans families since 2011. Combining this with his previous working experience with the Canada Revenue Agency enables him to help a wide range of individuals, families and businesses. As an Independent Broker he devotes time to educating the consumer and implementing comprehensive financial plans for both individuals and businesses in areas including insurance and investments.
\nThe information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. I recommend that you obtain your own independent professional advice (preferably me) before making any decision in relation to your particular requirements or circumstances.<\/i><\/span>
\n <\/p>\n","protected":false},"excerpt":{"rendered":"

Seg funds vs Mutual funds Segregated funds\u00a0are an annuity issued by an insurance company. They are\u00a0 similar to a mutual fund except for the fact that they come with capital or\u00a0 income guarantees as...<\/p>\n","protected":false},"author":1,"featured_media":24128,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":[],"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[4,7],"tags":[181,212,261,267,323,361,366,478,479],"_links":{"self":[{"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/posts\/379"}],"collection":[{"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/comments?post=379"}],"version-history":[{"count":0,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/posts\/379\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/media\/24128"}],"wp:attachment":[{"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/media?parent=379"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/categories?post=379"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/tags?post=379"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}