In the current volatile market environment, I advise my clients to save wisely for the future. We all work for the prosperity of our family and also very well know that financial security can provide a large umbrella of physical, and emotional protection for us at the times of need.
Different people have different future financial needs and goals for their investment; that can be for retirement, child’s wedding, buying a home, or financial safety of the family upon sudden death.
Now, the question is how can we assure that the different financial goal can be achieved more efficiently and in secure manner? By making wise investments decisions for the future, consistent & thoughtfully over several years can be an effective strategy to accumulate wealth and achieve financial goals. Investing hard-earned money in investment products that gives maximum favourable returns and assurance for the principal amount that is invested.
Due to psychological, historical viewpoint & systematically advertising, majority of people believe Banks are the only financial institution that provide investment options, and it is safe to invest in a bank.
This is a myth simply because they do not know that there are other options available which not only give the investor all the investment options that Banks provide but also provide other benefits under the protection of Insurance Laws. Protection of insurance laws give peace of mind to investor that their principal invested amount not only has the chance of higher growth to achieve financial goals but in the event of down trend of the market or sudden death it is protected 75% to 100%, under the provisions of the contract.
Due to lack of knowledge about the benefits of protection to investor’s investment in Insurance Companies, still Banks are the holder of huge amounts in RRSP or TFSA account under Mutual Funds that have no protection on the principal invested amount.
Insurance Companies provide similar opportunity of growth under Segregated Funds for an investment as the Banks provide under Mutual Funds but with so many additional benefits under the Insurance Law. Let us discuss this in details a bit :
Segregated funds, is an investment option provided by life insurance companies only, because they have protection and additional benefits under Insurance Laws. This means your money, not only has chances of higher growth as per your risk tolerance, but also has the protection around your invested money, under the provision of insurance laws for Maturity & Death benefit guarantee provided by the insurance company. This protection in not provided to your investment in banks under Mutual Funds.
● First, Under Maturity Guarantee provisions, Segregated funds, provide between 75% to 100% guarantee to your invested money. That means, in downtrend market, say by chance around your retirement or at the time of withdrawal after the maturity date if your portfolio is below than your initially invested money, your money is protected at least up to your principal amount as per the provisions of maturity guarantee. For instance you invested $100000, upon maturity due to down trend of market, money in your portfolio left is $80000, insurance company will put $20000 and give you $100000 if the guarantee is 100%. If due to growth money is more than $100000 you will get the higher amount. So this protection is for the bad times which is not offered under Mutual Fund investment. Similarly, Under Death Benefit Guarantee provisions, upon death 75% to 100% of your principal investment has the protection too, in downtrend market. These Guarantees takes away worries of losing your initially invested money, which makes our investment option more attractive & safe. Please remember this does not apply to a Mutual Fund investment.
● Bypassing Probate Laws – The second biggest advantage of segregated fundsunder insurance laws, is that they ensure a speedy, hassle free and confidential transfer of funds to spouse or beneficiary in case of untimely death of the investor, usually within 30 days or so by-passing taxation or probate laws under Insurance law protection. Please remember this does not apply to a Mutual Fund investment. .
● Creditor Protection to investment- Another major advantage of segregated funds is that it offers creditor protection for the beneficiary (family member); no creditor can take away from the benefit of your family member, the amount goes directly to the beneficiary. However, please make sure one does not do a Segregated Fund investment for the sole purpose of creditor protection.Please remember this does not apply to a Mutual Fund investment.
● Reset feature of Investment – Many insurance companies provide this extra feature of resetting principal upon growth and apply guaranties to the new amount after reset. This feature may further move the maturity Guarantee date. Again, please remember this does not apply to a Mutual Fund investment.
The above mentioned features of investment makes it very attractive for the investors however, still majority of people do not know about all this and make their RRSP or TFSA investments in Banks. A great way to learn online trading investments is to invest time and energy into a world class training academy and test your knowledge on a trustworthy trading platform.
Being an Insurance & Investment Adviser I can not only advise you how to grow your hard earned & saved dollars in an investment, but also can show you the way to grow it safely protecting the hard earned money you are investing.
Please come to my office or call me to make an obligation free appointment so that I can tell you more about the hidden facts of the Financial Industry. For further information, contact me at 604-996-6862 or email me at [email protected]
