When it comes to choosing an investment product, sometimes it can all come down to the details. The information below will explain some of the advantages that only segregated funds can offer. And when you work with Thierman Financial, these advantages are automatically included with almost all of our investments.
What is a segregated fund?
There are three types of funds that people can invest in: pension funds, segregated funds and mutual funds. A fund is a group of cash, stocks, bonds, real estate (and possibly other investments) and is usually managed by a fund manager. Mutual funds are offered by banks and trust companies. Segregated funds are offered only by insurance companies and have unique benefits that you won't get with mutual funds or pension funds.
Benefits of segregated funds
PROMPT HASSLE-FREE PAYMENT OF THE DEATH BENEFIT
Settling an estate can take months. But if you designate a beneficiary with your segregated fund, the death benefit isn’t considered part of your estate – which means we can make sure your beneficiary gets their payment in just a few business days.
NO FEES PAYABLE AT DEATH
With segregated funds, the death benefit will always be paid out at no cost to your beneficiary, who will never pay any probate fees, legal fees or surrender charges. In a lot of cases, that can be a sizeable amount.
THE GUARANTEED DEATH BENEFIT TO PROTECT AGAINST MARKET DOWNTURNS
Segregated funds include a 100% guarantee against market downturns in the event of death. If your investment doesn’t offer a guarantee of this type and the markets are in free fall at the time of your death, your estate could receive a lot less than what you invested.
IN THE EVENT OF BANKRUPTCY
Depending on who you name as your beneficiary, the money you invest in segregated funds can be exempt from seizure by creditors. If you have your own business, this is an essential tool to protect your financial security.
To learn more about segregated funds and to see if they’re right for you, contact a financial advisor at Thierman Financial today.