Send money to yourself in the future!

That is basically why people should be investing some of their money now – so they will have enough money in the future when they retire. Government programs(Old Age Security / Canada Pension Plan)  that many of us rely on for their retirement years are under great pressure to continue at current levels – particulary when you consider the baby boomers are about to enter their retirement years. Compound this with the fact that the population of the younger generation is much smaller – meaning Governments won’t be able to collect the same revenues to fund these retirement programs that they once did.

In addition, as you plan for your retirement, you must keep an eye out for inflation. How much did things cost you 10 years ago? 20 years ago … compared to today. You don’t even have to go back that far … just compare the price of gasoline, heating oil, electricity etc now to just a few years ago. When these commodities rise in price – so does everything else which depend on petroleum products to deliver food, building materials etc. etc. to your favourite stores.

“But the Markets are Uncertain…”

Yes you’re right the markets are uncertain – but if you look at any graph invetment markets have always fluctuated – but the general direction has been “Up!” (Buy Low – Sell High). So it is important to actually take advantage of the market when the market is in decline – “BUY LOW”

We will be happy to show you techniques that will help you buy when the market is low – and to reduce the bumps along the way of your invetment cycle.

Use Guaranteed Investment Funds to Help Take Away the Worry

Many people are not aware that investment funds are available that provide solid guarantees in order to protect your retirement nest egg. Most people are familiar with Guaranteed Investment Certificate (GIC’s) that will provide you with a guaranteed rate of return. While GIC’s might give you a sense of security – it is largely a false sense of security-  because the rate of return on GIC’s is quite low – hardly keeping up with inflation. At retirement you may find that your purchasing power has actually decreased and you don’t have enough to live on when you factor in inflation.

Most people are familiar with “Mutual Funds” sold by banks and other financial institutions. Mutual Funds, however, do not offer any guarantees on your money – so if the market happens to significantly decline as you are about to retire – then you can find you have a major problem on your hands… and perhaps will be forced to delay your retirement for several years. If you need to be convinced of this then check out what happened to market returns in the past 10 years or so.

Segregated Funds – The Guaranteed Alternative!

As pointed out above – most people are familiar with Mutual Funds offered by the banks and various investment companies. Unfortunately most people are not as familiar with “Segregated Funds” offered only by Life Insurance companies. “Seg Funds” as we like to call them for short are required by law to provide at least 75% Guarantee on your principal investment. However, many insurance companies, for competitive purposes offer 100% guarantee on your principal

In addition to that, many insurance companies also have a unique feature of resetting your principal to a higher amount – during periods of market growth. Thus your guaranteed amount may be higher that the original amount you invested in the first place!!

The story even gets better than that….there are actually 2 guarantees within the Seg Fund Invetment contract.

  1. Guarantee on Maturity (as described above)
  2. Guarantee at Death

Should you die and the market conditions are low, the insurance company will provide your named beneficiary, such as members of your family, the higher of market value or the guaranteed contracted amount. This way, your loved one’s are protected against a market loss at a time when money is often need the most.

Seg Funds also have additional features that make them superior to mutual funds. They may provide Creditor Protection – so that if you are sued, these funds can, in many circumstances, be protected from creditors.

Another, significant feature is that Seg Funds, by-pass your will, and thus avoid probabte fees and lengthy prothonatary delays (not to mention lawyer and accounting costs) But even more important money can be made available to your beneficiary(ies) in a very short period of time after the insurance company receives their requested documentation such as a death certificate etc.

PRIVACY – The death benefit of a Segregated Fund is paid directly to the named beneficiary(ies) – and thus no one is really aware of your investments or values – unless, of course, you or the beneficiary decide to tell them!

Mutual Funds, generally are subject to the will – and anyone (including the media) can obtain a copy of your will from the prothonatary office – and thus become aware of all the details of your estate – including your investment funds.

Compare Seg Funds to Mutual Funds


(Banks and Other Investment Companies)

GUARANTEES ON YOUR PRINCIPAL INVESTMENT YES – Minimum 75% or 100% from some companies NO Guarantees
ABILITY TO GUARANTEE YOUR GAINS (Re-Set Your Principal) YES – Some Insurance companies allow you to reset your principal up to 4 times per year NO – Your Investment Gains cannot be guaranteed for your future.
IS THERE A MINIMUM DEATH BENEFIT GUARANTEE YES – The higher of Market value or a Minimum 75% of your principal or as offered by some insurance companies  100% of principal plus the market gains that were reset. NO – You are only entitled to the market value at the time of death. Unlike most insurance companies, deductions will also be made for any surrender charges that are stated in the contract
CREDITOR PROTECTION YES* – Under most circumstances, as long as there is a named “preferred class” beneficiary such as a spouse AND deposits were considered to have been made in good faith creditor protection should apply – however, courts may have to rule on this in some cases. NO – Should you go bankrupt, creditors will have full access you seizing the value of your assets
AVOID WILL / PROBATE/PROTHONATARY YES – The payout on death avoids the will – and thus avoid probate fees. Lenghthy prothonatary procedures and lawyer/accounting fees associated with the value of the estate NO – In most cercumstances moneies left in Mutual Funds form part of the estate and are therefore subject to probate fees – and funds cannot usually be disbursed until all matters of the estate have been settled.
PRIVACY YES – Since proceeds of Seg Funds go directly to the named beneficiary – no one else will be aware that you were the owner of seg funds NO – Since the proceeds of a mutual fund become part of your will – anyone (even the newspapers) can get a copy of your will – and thus your entire estate could be made available to someone who may be interested in it.
Management Fees Usually a bit higher than Mutual Funds – but many clients are more comfortable with the guarantees noted above Not usually at the level of most seg funds – but then again Mutual Funds have no guarantees or the many cost saving features of Seg Funds.

We would be happy to provide you with full details regarding the many of the Seg Funds available from the Insuarnce Industry. Seg Funds may offer many of the very same funds offered by the mutual fund industry – as well as the many fine, solid performing funds offered by the Insurance Industry.

Guaranteed 5% Bonus



Several insurance companies have now introduced a new type of Segregated Fund that is truly unique in the investment industry. Referred to as a Guaranteed Withdrawal Benefit (GWB), this product is designed to provide you with Guaranteed Lifetime income – no matter how the market performs. In addition, the GWB has most of the same features of a regular Seg Fund as described above.

There are two main components to this plan…

5.0% “Notional Bonus”

During years of accumulation your investment attracts a 5.0% “notional” bonus each year* – no matter what the market performance has been for that year. The actual market value of your contract could even have been negative – but the 5.0% bonus is still applied.
(* NOTE: The only time you would not receive the 5.0% bonus is for any year that you make a withdrawal from the plan.)

Guaranteed Lifetime Income

At retirement (or when you decide to take an income stream), a calculation is made as to how much income you will receive. That income is fully guaranteed throughout your lifetime – even though you keep investing in the various available funds you income can never be lower – even if the market declines. Pure Security! In fact, since these contracts automatically re-set the principal every three years – your income can actually go up. Once it goes up – the income can never go lower. The GWB is definitely a plan worth investigating.

Please contact Gerry via email, or call (902)479-7000 for full details.