Guaranteed investment funds are by far one of the best powerful investment solutions for increasing cash value in RRSPs, TFSAs. or in other cash investment plans.

Guaranteed investment funds, also known as segregated funds, are insurance products. Apart from some similar features to mutual funds, such as professional management, the ability to invest regularly in small dollar amounts, diversification, the ability to be held in a registered plan, automatic reinvestment of allocations, and the ability to transfer between funds, they own many exclusive features only insurance products can possess and offer many unique advantages only insurance products can supply. They combine the growth of mutual funds with the security of principal guarantees. 

Consult an insurance advisor for how to get them. Remember, guaranteed investment funds are insurance products, you can only obtain them from insurance company.

You can buy guaranteed investment funds with registered plans, such as your Registered Retirement Savings Plan (RRSP) and your Tax Free Savings Account (TFSA), or you can buy them with non-registered plans through cash. No matter what situation, you can achieve the following unique advantages of guaranteed investment funds.

Unique Advantage No. 1: Maturity Guarantee

The maturity guarantee means that when your deposit matures and is redeemed, you will receive the guaranteed top-up amount if the market value is less than the guaranteed amount. The maturity guarantee period is usually 10 years, and the maturity guarantee amount is usually 75% of your principal. If the market value is greater than the guarantee, then you receive the actual greater market value. The advantage of 75% limits investment risk of loss, while provides unlimited potential of investment growth.

Unique Advantages No. 2: Death Benefit Guarantee

Death Benefit Guarantee guarantees 100% of your deposits made before age 80 and 80% of your deposits made after age 80. If market value is greater than the guarantee amount, your beneficiary receives the greater market value.

Unique Advantages No. 3: Estate Preservation – Bypassing Probate

Probate process can be costly and lengthy. It is a legal public process for the purpose of death tax. It levies a charge against the value of assets in the estate of the person who dies. This charge applies to any asset that does not have a named beneficiary, such as bank accounts, stock portfolios, and real estate. Because guaranteed investment funds is an insurance product and you have a named beneficiary in your contract, you can bypass the probate process and significantly save you a large amount of money and preserve your estate.

Unique Advantages No. 4: Creditor Protection

Creditors are the people or companies whom the deceased owes money. Creditors can be a bank holding a mortgage, or Canada Revenue Agency for income tax, or business suppliers, partners, or employees. Creditors are entitled by law to sue the deceased’s estate to recoup their losses. However, creditors cannot lay claim to the proceeds of your guaranteed investment funds because you have named beneficiaries in your contract.

Unique Advantages No. 5: Bankruptcy Protection

Assets held in your guaranteed investment funds contract may be protected from creditors in the event of a bankruptcy. Because guaranteed investment funds contract is an insurance contract, and under provincial laws, the interests of insurance beneficiaries may override the claims of creditors.

Unique Advantages No. 6: Reset Benefit

When your market value increases, you can reset the increased market value, so your maturity and death benefit guarantee will immediately be based on the increased reset amout. When the contract is reset, the maturity date is adjusted to 10 years from the reset date.

Unique Advantages No. 7: Favourable Tax Treatment

In guaranteed investment funds, you receive favourable tax treatment, because capital gains and losses are reported to you on an on-going basis. Capital loss can be deducted from capital gains. Tax informatio is tracked and reported by the insurance company on behalf of you, so greatly simplifying the annual tax-filling process. While in mutual funds, you only receive capital gains but do not receive capital losses on an on-going basis to offset capital gains. You are required to maintain your own tax information for annual tax fillings.

From all the listed above, you can see the unique benefits and advantages that guaranteed investment funds have. Then why not select them as your powerful investment plan?

Want to know more information based on your unique needs?  Call Yan Li today to book an appointment.

Yan Li 李燕

(Yan Li  李燕，President of Canada Valuelife Financial Services Corporation; Registered Teacher in Ontario Canada;  Licensed Insurance Advisor,  President Award Winner; Author; Translator; Value Life Coach; Speak English and Mandarin.  Tel: 416-388-6484. Email: yan@find-the-value-in-life.com. Website: www. find-the-value-in-life.com. Contact Yan Li for more info based on your unique needs. Join our mailing list for more upcoming value life contents)