THE ADVANTAGES
OF SEGREGATED
FUNDS
What are segregated funds?
A segregated fund is an insurance product exclusively distributed by insurance companies. It is similar to a mutual fund, but provides, among other features, protection against market downturns, by guaranteeing 75% or 100% of the invested amount at maturity or death.
This guarantee, which is not available for mutual funds, represents a major advantage as it limits the risk of loss.
Segregated funds in the IAG Savings and Retirement Plan also offer several additional advantages that are not available for mutual funds.
Comparing mutual funds and segregated funds
Advantages in common
Mutual funds
Segregated funds
- Investment in registered and non-registered contracts (TFSAs, RRSPs, RESPs, RRIFs, LIRAs, LIFs, and locked-in RRSPs)
- Yield potential and a wide range of funds options
- Access to capital at all times (redemption fees may apply for a certain period)
- Possibility of making certain withdrawals without surrender charges
Advantages of iA Financial Group segregated funds
Mutual funds
Segregated funds
- Guarantee applicable at maturity or death on deposits made
- Investment growth protected through resets
- Possibility of no probate fees
- Quick settlement at death
- Creditor protection
- Quicker, easier tax returns
- Possibility of guaranteed income for life
At iA Financial Group, our wide range of competitive and high-performance funds gives you the flexibility you need for optimal portfolio diversification.
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The main advantages of investing
in iA Financial Group segregated funds
Capital protection
On contract maturity or death, this protection allows you to recover 75% or 100% of the amounts invested if the market value of the funds is lower.
Resets
Our segregated funds, available in the 75/100, 100/100 and FORLIFE Series, offer the possibility of locking in gains every year in order to protect investment funds during market fluctuations.
Possibility of avoiding probate fees
A segregated fund contract makes it possible to designate a beneficiary and therefore avoid paying several fees associated with estate settlement, including probate fees. Probate fees may vary according to each client’s personal situation and province of residence.
Quick settlement at death
The value of the funds is promptly paid to beneficiaries in the event of death. This means that, among other things, relatives do not need to personally take care of the deceased’s financial commitments.
Creditor protection
This can be a considerable advantage for small business owners and professionals who want to limit their risk of loss in case of bankruptcy or lawsuits. Certain conditions apply.
Quicker, easier tax returns
All tax calculations are already done on the T3 slip (and the Relevé 16 in Quebec) sent by iA, which makes income tax returns easier and faster.
Possibility of guaranteed income for life
With the FORLIFE Series, segregated funds give you access to guaranteed income for life without having to worry about losing capital.
Here’s how avoiding probate and other segregated fund estate-related fees can make a difference.
Illustrated example of net savings through beneficiary designation:
Paul deposited $25,000 in his contract 15 years ago, then $7,500 per year until he died at age 68.
Mutual funds
Segregated funds
- Market value at death1
- Probate fees – Up to 1.5%2
- Professional fees – Up to 5%3
- Fees for estate executor – Up to 6%4
- Redemption fees – Up to 7%5
- Total fees
- Net value after death (before tax)
- Savings6
- $213,800
- $2,460
- $4,500
- $6,400
- $0
- $13,360
- $200,440
- $209,000
- $0
- $0
- $0
- $0
- $0
- $209,000
- $8,560
Why choose iA Financial Group?
Number one in net segregated fund sales in Canada since 2016 and a full range of funds.
Expertise: A range of funds managed by renowned external managers and firms paired with the in-depth expertise of an internal investment management team (iAIM).
Variety: Complementary investment products to meet the needs of all types of investors.
Investment guarantees: All our products come with guarantees.
That’s a significant advantage!
