Segregated Funds

What is a Segregated Fund?

As investors become more concerned about managing risk in their portfolios and protecting their principal segregated funds, with their guarantees and unique estate planning features, are more in demand. Empire Life segregated funds can give you the growth potential of investment funds with the security of insurance guarantees.

A segregated fund is an investment option sold by insurance companies. The fund is available within an insurance policy, therefore investors can benefit from valuable maturity and death benefit guarantees. You don’t buy thefund units directly, but the units are used to determine the benefit value of your policy.

Maturity Benefit Guarantee

As part of an insurance policy, segregated funds have a maturity benefit guarantee option of at least 75% withsome policies offering a 100% maturity benefit guarantee.* When the policy matures, you are guaranteed to receive the greater of 75% (or 100%) of your net deposits**, or the market value of your investments. This meansno matter how markets perform, your investments have the potential for downside protection at maturity.

Death Benefit Guarantee

Today more people are recognizing the valuable insurance protection the death benefit guarantee providesduring their saving and retirement years. The death benefit guarantee can range from 75% to 100% of the investornet deposits upon death if there is a named beneficiary.*

Resetting Guarantees

Many policies allow you to reset your benefit guarantees up to twice each year. If the market value of your segregated fund investments is higher than your net deposits, you can reset your maturity and death benefitguarantees based on the higher value.

Ability to Bypass Probate

With an insurance policy, the death benefit is paid directly to the named beneficiary rather than to the estate.This means that the value of your segregated fund investments may bypass probate, a costly and lengthy process,allowing your named beneficiary to receive the proceeds faster.

Potential Creditor Protection

As part of an insurance policy, segregated funds may be protected from seizure by creditors if you name yourspouse, child, parent or grandchild as the beneficiary of your policy, or if you name an irrevocable beneficiary (abeneficiary that can not be changed). This feature is especially important for business owners and professionals.Note that there are certain circumstances where protection from creditors will not exist. It’s always best to obtain independent legal advice if creditor protection is a concern.

* Features and benefits of segregated fund policies vary between insurers and policies. Information regarding the particular features of a segregated fund policy can be found in the Information Folder for the plan being considered and should be carefully readand understood before making a purchase.

** Net deposits are your deposits minus your withdrawals on a proportional basis.