Creditor Protection

Segregated funds are an insurance product and therefore it receives the special treatment accorded to insurance contracts when it comes to creditor protection and bypass of probate.†

Protection from creditors is provided to the contract holder in certain cases when he or she names a spouse, child, grandchild, or parent as a beneficiary of the contract. This means a creditor cannot claim the value of the segregated fund against debts of the contract owner.

Many individuals who have exposure to lawsuits because of their field of work or employment consider segregated funds as a suitable investment choice.† Individuals more exposed to this type of risk are professionals, owners of corporations and certain self-employed individuals who may be subject to unlimited liability.

Most registered plans such as Registered Retirement Savings Plans and Registered Retirement Income Funds (RRSPs and RRIFs) held with an insurer under a segregated fund contract will be protected from creditors, assuming individuals did not invest the funds into the contract with fraudulent pretences to avoid creditors.

Provincial legislation varies from province to province.† In certain provinces RRSP and RRIF assets are generally protected from any creditors.†† It is important that investors educate themselves and receive professional financial and insurance advice.†

Investors should read the Information Folder for important information on the segregated funds of interest.† The Information Folder will contain information and details on factors affecting maturity values, death benefits, reset features, fees and commissions and much more.† Segregated funds unit values fluctuate in value and redemptions or sales can be made at a loss.†

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