Segregated funds (seg funds) are investment products offered by insurance companies that combine the growth potential of mutual funds with unique insurance features like principal guarantees and creditor protection.

🔧 How Seg Funds Work

When you invest in a seg fund:

• Your money is pooled and invested (like a mutual fund)
• The insurance company guarantees a portion of your principal
• You name a beneficiary who receives proceeds directly

✅ Key Benefits

1. Principal Guarantees

At maturity (10+ years) or death, you are guaranteed to receive at least 75-100% of your deposits, regardless of market performance.

2. Death Benefit Guarantee

Your beneficiary receives at least the guaranteed amount (75-100%) even if markets have declined.

3. Creditor Protection

With a named beneficiary, seg funds may be protected from creditors in bankruptcy. Important for business owners and professionals.

4. Probate Bypass

Proceeds go directly to beneficiaries without going through probate—faster and more private.

5. Reset Options

Some policies let you "lock in" gains by resetting the guarantee amount when investments grow.

💵 The Cost of Guarantees

🤔 Who Should Consider Seg Funds?

• Business owners: Creditor protection is valuable
• Conservative investors: Principal protection provides peace of mind
• Estate planning: Bypass probate and ensure beneficiaries receive funds
• Near-retirees: Protect savings while maintaining growth potential

⚖️ Seg Funds vs Mutual Funds

Feature	Mutual Funds	Seg Funds
Principal Guarantee	No	Yes (75-100%)
Creditor Protection	No	Yes (with beneficiary)
Bypass Probate	No	Yes
Fees	Lower	Higher