Insurance companies offer surprising benefits to retirees

Ask your financial institution about the benefits of investing with a Canadian life insurance company.

While each investment or insurance company has their own investment options, most offer segregated funds. Segregated funds, in general, are a pool of investments, professionally managed by different investment managers and administered by life insurance companies.

The life insurance companies add to the benefits that can make these investments more attractive than mutual funds. Here is the list of some of the benefits offered to segregated fund holders:

  • 100% of your investment guaranteed upon death to your beneficiaries, no loss of capital upon death. Some companies offer an additional 4% annual death benefit guarantee.
  • A maturity guarantee of 100% of your principal investment regardless of stock or bond market conditions.
  • Maturity guarantee reset and death benefit guarantee on a higher amount. While your investment grows, so does your guarantee upon maturity and to your beneficiaries, thus locking in future profits for you and your family Creditor protection for professionals and small business owners.
  • Under the insurance act, you have the potential to protect those investments from creditors. A professional such as accountant, dentist, doctor or small business owner may benefit.
  • Estate planning benefits such as no probate, and it is not a matter of public record, so you can keep it private from other family members. One hundred percent of the investment passes directly to your beneficiaries, not through your estate.
  • I could list another set of estate planning advantages just by this benefit alone – Income guarantee. While popular in the United States, this new type of guarantee may soon be commonplace with Canadians.
  • Finally the investment benefits. You have the security of the written guarantees, the estate planning, and creditor benefits, plus you also have access to most of the top-performing investment managers available to build a truly diversified and well-managed portfolio.

If you want to add contractual written guarantees into your investments, then segregated funds may be worth a closer look for your retirement plan.

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