: My wife Anita will be 54 years old this year and has about $300,000 invested with an adviser who wants to move it all into segregated funds. She expects to work for another 10 years at her job as a marketing consultant. I looked at the performance and the costs of the funds the adviser recommends, but I don’t see the value in making the move.
Typically, a death benefit guarantee is offered at 75 per cent or 100 per cent, meaning that if the fund value, net of withdrawals, drops below either of those thresholds at death, the insurer will make up the difference. As these are insurance contracts, they may also be eligible for coverage via Assuris, a non-profit that provides guarantees to insurance contracts should the member provider default on its ability to cover policy claims.
Segregated funds also allow investors to name beneficiaries on non-registered contracts, which is not available when buying mutual funds. This has an estate-planning benefit, because similar to a tax-free savings account or registered retirement savings program account, a non-registered segregated fund can be paid seamlessly to a named beneficiary. This can speed up the estate settlement and avoid probate and legal fees.