WHAT IS A SEGREGATED FUND?

Segregated funds offer many of the same investment

opportunities and mandates provided by mutual funds,

but have one important difference: segregated funds

are insurance contracts known as individual variable

annuities, and are therefore governed by the

Insurance Act. It is the insurance contract that provides a

number of additional features and benefits that are not

available with mutual funds.

FEATURES THAT ALL SEGREGATED

FUND CONTRACTS HAVE IN

COMMON

DEATH BENEFIT GUARANTEE AND

MATURITY GUARANTEE

Guarantees that are common to every segregated fund

contract include a death benefit guarantee and a

maturity guarantee. The death benefit guarantee

protects a specific percentage of the value of an

investment upon the death of the annuitant. The

maturity guarantee protects a percentage of the value of

an investment at the end of a specified term.

THE ABILITY TO BYPASS PROBATE

In the event of an annuitant’s death, the proceeds of an

insurance contract pass directly to a named beneficiary

without going through probate. The benefit is that the

asset avoids probate and estate administration fees.

Furthermore, the beneficiary will also receive the

proceeds without extended delays – a considerable

benefit during a time of need.

THE POTENTIAL FOR CREDITOR

PROTECTION

In general, when the beneficiary is a parent, child,

grandchild or spouse of the annuitant (for Quebec,

ascendants and descendants of the owner), and the

contract wasn’t set up for the purpose of avoiding

creditors, segregated fund assets may be protected from

creditors.

This is a benefit to all small business owners,

professionals and entrepreneurs who want a costeffective

means of ensuring their personal financial

assets are not subject to professional liability.

NOT ALL SEGREGATED FUNDS ARE

CREATED EQUAL

It’s important to know that not all segregated funds are

created equal. Segregated funds from Manulife

Investments offer clients a combination of superior

choice, growth potential and the security they need to

stay invested. With this much choice, you are sure to

find an investment option that is “tailor made” to

complement your clients’ financial plans.