Segregated funds
Grow Your Wealth. Keep It Protected.
Segregated funds combine the growth potential of investment funds with the security of insurance guarantees — protecting your principal, bypassing probate, and shielding assets from creditors.
What are segregated funds?
Segregated funds are investment products issued by life insurance companies. Like mutual funds, they hold a diversified portfolio of stocks, bonds, or other assets. Unlike mutual funds, they come with contractual guarantees that protect a portion of your invested capital — regardless of how markets perform.
Because they are insurance contracts, segregated funds carry unique legal advantages that no bank account, RRSP, TFSA, or mutual fund can replicate: a named beneficiary designation, potential creditor protection, and estate bypass on death.
Seg funds vs. mutual funds — at a glance
The guarantees explained
Three protections no other investment offers.
Maturity Guarantee
At the end of the contract term (typically 10 years), you are guaranteed to receive back a set percentage of your deposits — commonly 75% or 100% — regardless of market performance. Your money grows in good markets and is protected in bad ones.
Death Benefit Guarantee
If you pass away while holding the contract, your named beneficiaries receive a guaranteed minimum payout — typically 75% to 100% of your deposits. This ensures your estate receives a meaningful benefit even if markets have declined.
Reset Option
Many seg fund contracts allow you to lock in market gains by resetting your guarantee base to the current market value. This lets you capture upside while maintaining downside protection on your new, higher balance.
Why seg funds stand apart
Advantages that go beyond the investment.
Creditor Protection
When a family member is named as beneficiary, seg fund assets may be protected from creditors in the event of bankruptcy or legal action. This is a critical advantage for business owners, professionals, and the self-employed.
Estate Bypass
Proceeds pass directly to your named beneficiaries — outside of your estate. This means no probate fees, no delays, no public disclosure, and no executor involvement. Your family receives the funds quickly and privately.
Principal Protection
The maturity and death benefit guarantees mean you can invest in market-linked growth without risking your entire principal. This makes seg funds especially valuable for investors approaching or in retirement.
Named Beneficiary
Unlike mutual funds or GICs, seg funds allow you to name a beneficiary directly on the contract. This is a powerful estate planning tool that keeps your wealth transfer simple, private, and efficient.
Who benefits most from segregated funds?
Pre-retirees (50–65)
Protect accumulated savings from a market downturn in the years just before retirement — when a loss is hardest to recover from.
Retirees drawing income
Maintain growth exposure while guaranteeing a minimum estate value for your beneficiaries.
Business owners
Shield personal and business assets from creditors while still investing for long-term growth.
Estate planners
Bypass probate, reduce estate administration costs, and ensure a fast, private transfer of wealth to loved ones.
See how seg funds fit your retirement plan.
Book a complimentary consultation and we'll walk you through how segregated funds can protect your savings, reduce your estate costs, and give you confidence in any market.