Insurance Investing
In addition to traditional life insurance and living benefits
products, there are also several types of products that combine the
benefits of life insurance with an investment component.
Choose from the following links for a brief explanation of each
product:
Segregated Funds
Like mutual funds, segregated funds are professionally managed
and invested in a portfolio of securities. In fact, many segregated
funds invest in brand-name mutual funds. Unlike mutual funds,
segregated funds are insurance contracts that offer additional
benefits such as principle investment guarantees.
The primary purpose of segregated funds is for estate planning; not
only will insurers guarantee between 75% and 100% of your initial deposit
at the time of your death, but the greater of your investment value
or guarantee will flow directly to your named beneficiaries, without
having to pass through your estate. As well, the same guarantee
standards apply if you hold on to the contract until maturity (usually
10 years from the date of your deposit).
Annuities
The purpose of an annuity is to provide you with a steady,
guaranteed stream of income. For many older investors who want to
ensure they have a guaranteed income, an annuity offers simplicity
and a guarantee. In return for a lump sum, the insurer will deliver
a regular income for your entire lifetime. That eliminates the need
to manage the investment, continuously looking for the highest rates
and worrying about what prevailing rates will be at maturity. If you
wish to have the initial capital returned at death, the annuity can be
used in conjunction with a life insurance contract. This strategy
often delivers a greater net yield than traditional fixed-income
products.
Guaranteed Investment Annuities (GIAs)
These operate just like Guaranteed Investment Certificates (GICs),
only with the same estate planning benefits of segregated funds. Interest
is earned and either taken as income or reinvested to compound; at death,
the initial capital is delivered to your named beneficiary, thereby
avoiding the costs and delays associated with probating your estate.
Take the next step…talk to an advisor.
For additional information on insurance solutions, please contact
a life-licensed advisor. Or, ask an
advisor to contact you.
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