Segregated Funds

Core Advantages

Investment growth with an insurance-contract backbone

The three features that set segregated funds apart from a standard investment account.

Guaranteed Principal & Maturity Protection

Typically 75%–100% of your original investment is guaranteed at maturity or death, regardless of market performance.

Guarantees apply at a set maturity date
Death benefit guarantee for beneficiaries
Optional reset feature to lock in gains

Probate Bypass & Fast Wealth Transfer

With an eligible named beneficiary, proceeds generally pass directly and privately, bypassing your estate and Ontario probate fees.

Faster payout to beneficiaries
Kept private, outside the public will
Requires a named, non-estate beneficiary

Potential Creditor Protection

A possible legal layer of protection for business owners and self-employed professionals, not automatic, and dependent on your specific beneficiary designation.

Requires an eligible family-class beneficiary
Not available to defeat existing creditors
Best set up early, before it's needed

The Comparison

Segregated Funds vs. Mutual Funds

Both can hold similar underlying investments. The difference is the insurance contract wrapped around a seg fund, and what that wrapper guarantees.

Feature Seg Funds Mutual Funds

Maturity/Death Guarantees 75–100% None

Named Beneficiary Designation Yes No (est. only)

Probate Bypass Generally No

Potential Creditor Protection Possible* No

Reset Options Often available N/A

*Depends on an eligible beneficiary designation and timing, not automatic. See FAQ below.

Carriers we compare for you

A sample of the Canadian insurers in our market comparison.

Guarantee levels, fees (MERs), and reset terms vary by carrier and fund. Comparison is how we match the contract to your goals.

Account Types

Held in the account structure that fits your plan

Segregated funds aren't a separate account type: they can live inside most of these.

RRSP & Spousal RRSP

Tax-deductible contributions with tax-deferred growth toward retirement.

TFSA

Tax-free investment growth and tax-free withdrawals at any time.

RRIF & LIRAs

Structured retirement income streams with continued growth potential.

Non-Registered Accounts

Flexible wealth management for individuals and incorporated professionals.

FAQ

Common questions about segregated funds

What is the difference between a segregated fund and a mutual fund?

Both invest in similar underlying assets, but a segregated fund is structured as an insurance contract, which adds maturity and death benefit guarantees, a named beneficiary designation, and generally higher fees (MERs) than a comparable mutual fund. The right choice depends on how much you value the guarantees versus minimizing cost.

How do segregated funds bypass probate in Ontario?

Because a seg fund is an insurance contract, it can name a beneficiary directly, much like a life insurance policy. When that beneficiary is a person (not your estate), the proceeds generally pass to them directly rather than through your will, avoiding Ontario's Estate Administration Tax and the delays of probate. Naming your estate as beneficiary removes this advantage entirely.

Can business owners protect their savings from creditors using seg funds?

Potentially, but it's not automatic and it's not absolute. Creditor protection generally requires naming an eligible "family class" beneficiary, a spouse, child, grandchild, or parent. It also can't be used to defeat creditors you already owe money to when you set it up: courts can unwind a policy purchase or beneficiary change made to dodge an existing debt. This is a legal question as much as a financial one. We'll flag when it may apply to your situation, but confirm the specifics with a lawyer, especially if you're already facing a creditor claim.

What are the maturity and death benefit guarantees, exactly?

Most contracts guarantee 75% to 100% of your deposits (minus withdrawals) will be returned at a set maturity date, typically 10 years from purchase, or on death, whichever comes first, regardless of market performance in between. Selling before the maturity date doesn't trigger the guarantee; you'd receive the fund's actual market value at that time.

Are segregated funds worth the higher fees?

It depends what you're solving for. If estate efficiency, creditor considerations, or capital guarantees genuinely matter to your situation, for example, an incorporated business owner or someone prioritizing certainty over maximum growth, the added cost is often justified. If those features don't apply to you, a lower-fee mutual fund or ETF portfolio may be the better fit. We'll walk through both sides rather than default to one.

Growth potential, backed by guarantees.