I was thinking the other day how we hear things and wonder; do I need that? Like the other day I heard someone talking about a sump pump and thought, do I need one of those? My friend said, when you need one you will know. Does the same rule apply to segregated funds? When I need one, will I know? Not one to sit around and wait for the day to come, I took it upon myself to uncover what this mysterious segregated fund was, and well, they seem rather a useful thing.

Face it, earning a great return on an investment is a little like winning the lottery. When the markets take a turn for the worse, it can be almost unbearable. For some of us, the ups and downs are just part of market life. For some like me, the ebb and flow can cause heart palpitations and excessive swearing, oops I mean sweating.

If you, like me are looking for a little security, a segregated fund may just be the way to go. Segregated funds are similar to mutual funds in that your investment is pooled with other investors’ assets and invested for you. A fund manager is responsible for selecting the investments that make up the fund. Where segregated funds differ is in the guarantee. Yes, I said guarantee.

Only offered through insurance companies like Equitable Life, segregated funds include an insurance contract that protects your investment. Here are just some of the advantages of investing in a segregated fund.

  • Death Benefit Guarantees: 75 to 100 per cent of your premiums (less withdrawals) are guaranteed upon your death
  • Deposit Maturity Guarantees: 75 to 100 per cent of your premiums (less withdrawals) are guaranteed upon reaching the contract’s deposit maturity date. (Usually 15 years from the date of first deposit)
  • Growth potential of the markets with access to investments from around the world
  • Private and confidential beneficiary designations
  • Potential creditor protection in the event of bankruptcy or lawsuit

Intrigued about segregated funds? Speak to your financial advisor about how a segregated fund can benefit your retirement savings plan.

 ™ denote a trademark of The Equitable Life Insurance Company of Canada