Segregated funds have similarity to mutual funds; however, they are provided by life insurance companies. The fact that segregated funds are designed as insurance contracts allows them to provide some benefits that mutual funds cannot.
The benefits of Segregated funds:
Guarantees - with segregated funds you are guaranteed to receive 75% to 100% of your investments when the contract ends or when you pass away.
Creditor protection - if you have a qualified beneficiary your segregated funds are usually protected against seizure by creditors. This can be an important benefit since in Canada no other type of investments held in RRSPs and RRIFs are protected from creditors.
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