Segregated Funds

Segregated Funds

Segregated Funds are sold by life insurance companies, it is similar to a mutual fund but has unique feature, such as the guarantee of all or part of the principal. If the fund loses value because of poor market performance, you get part or all of your original capital back but only if you keep the fund for a specific period of time, typically ten years. Segregated funds offer the possibility of protection from creditors. They are held separately from the insurance company’s other assets. Segregated funds are offered as RRSP’s (registered retirement savings plan), TFSA’s (tax free savings account), and RESP’s (registered education savings plan), among others.