Who is this for?
As a business owner, you’ve put a great deal of time, money and passion into establishing and growing your business. Segregated funds – which are professionally managed pools of money spread across different investments – can help protect your money should you run into tough financial times.
How will this help me?
A segregated fund policy is an insurance policy. For that reason, it may be protected from creditors – not only for your personal registered assets, but also your non-registered assets. The potential for creditor protection may be available where the beneficiary shares a specific type of relationship with the annuitant; for example, if they’re a spouse, child or parent.1 This level of protection is not available with mutual funds.2
What else do I need to know?
They can provide liability protection
As a business owner, the potential for exposure to liability is a real possibility; as a result, protecting your assets should be top of mind.
Business owners may be held liable if lawsuits are filed against an unincorporated business, making segregated fund policies valuable because of their potential ability to protect assets in the event of litigation.
They can offer protection against market downturns
Segregated fund policies give you growth potential while providing you with maturity and death benefit guarantees that can protect part or all of your investment. This means that, when you reach the policy’s maturity guarantee date or pass away, if your policy is worth less than its original value, the insurance protection will top you up to your chosen percentage (either 75% or up to 100% of the policy’s original value, proportionately reduced by any withdrawals).3
Overall, segregated fund policies have the potential to protect your money in times of market uncertainty while helping you limit your exposure to liability. By assisting you in protecting your assets, segregated fund policies can play an important role in helping you keep your business on track towards reaching the unique objectives you’ve set for it.
A description of the key features of the segregated fund policy is contained in the information folder.
1 In Quebec, the relationship is to the policyowner.
2 Creditor protection depends on court decisions and applicable legislation, which can be subject to change and can vary from each province; as such, it can never be guaranteed. You should talk to your lawyer to find out more about the potential for creditor protection in your specific situation.
3 Any amount that is allocated to a segregated fund is invested at the risk of the policyowner and may increase or decrease in value.