Segregated funds: the guarantee
Market investments with an insurance guarantee. See when it kicks in, and when it doesn't.
For educational purposes only. Simplified illustrations to help you understand how things work. Not financial, investment or tax advice, and not a recommendation.
Same investments, plus an insurance wrapper. The wrapper adds a guarantee, but only at maturity or death.
Guarantee (maturity/death)
When is the money paid out?
Markets fallMarkets rise
The guarantee tops it up by $1,500.
Key features, and the trade-off
Guarantee75% to 100% of deposits back at maturity or death, less withdrawals.
ResetsSome contracts can lock in gains, raising the guarantee.
Named beneficiaryPaid directly to them, usually skipping probate.
Creditor protectionPossible with certain beneficiaries. Not guaranteed.
Insurance contractIssued by life insurers. Assuris protects the guarantees, up to limits, if an insurer fails.
Higher feesThe guarantees cost extra, usually more than a similar mutual fund.
$10,000 deposit, no withdrawals or resets, market value after fees. Maturity is often 10 years or more after a deposit. Guarantees, fees and rules vary by contract; the contract and information folder always govern.
- Guarantees pay only at maturity or death
- Cash out early and you get the market value
- The guarantees come with higher fees
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