Potential postal disruption. Prepare for possible mail delays due to Canada Post labour negotiations. You can use our mobile app or log in to my Sun Life to submit claims and/or check on your investments.

Get more help here

Close search  
  • Please enter a search term.

Please select your language preference on the right hand side

Languages - Canada

  • English
  • Français
Back
Regions
Language
  • English
  • Français
Skip to signin Skip to main content Skip to footer
Sunlife logo
  • I am an:
    Advisor
    The selected view is for Advisors. Activate the menu to switch your view.
    Advisor
    Investor
    End of list. Press Escape to close the menu.
  • Practice management consulting
  • Applications & forms
  • Contact us
  • CANADA | EN
  • Search
  • Products

    Mutual funds

    • Overview
    • Sun Life MFS Funds
    • Sun Life Granite Managed Solutions
    • Sun Life Private Investment Pools
    • Sun Life Tactical ETF Portfolios
    • Sun Life Milestone Funds
    • Emerging Markets Funds
    • Private Client Pricing

    Segregated funds

    • Overview
    • Sun GIF Solutions
    • Sun Lifetime Advantage
    • Investment options
    • Sun Life GIFs Products no longer for sale

    GICs and Annuities

    • Insurance GICs and Trust GICs Overview
    • Insurance GICs
    • Sun GIC Max
    • Superflex
    • Trust GICs
    • Income Master
    • SLF Trust GIC
    • Payout annuities
  • Performance & Insights

    Mutual funds

    • Overview
    • Daily prices
    • Performance
    • Ratings
    • Fund codes

    Segregated funds

    • Overview
    • Daily prices
    • Performance
    • Ratings
    • Fund codes

    Insurance GICs and Trust GICs

    • Rates

    Insights

    • Commentary
    • Investor Education
  • Resources

    Advisor marketing & resources

    • Segregated funds marketing
    • Fund reviews
    • Payout annuities advisor resources
    • Trust GICs advisor resources
    • Insurance GICs advisor resources
    • Multi-product conversations

    Investor resources

    • Market volatility
    • Retirement Hub
    • MFS Insights
    • Solving the Know Your Product (KYP) puzzle

    Tools & calculators

    • Overview

    Mutual Funds

    • Mutual fund illustration tool
    • Granite Solutions tool
    • Series T calculator

    Segregated Funds

    • Choose your path
    • Current income rates
    • Investment GIF e-App
    • Sun Life GIFs Proposal tool

    Regulatory documents

    • Fund facts
    • Financial statements
    • Management Reports of Fund Performance and Quarterly Portfolio Disclosure
    • Simplified Prospectus
    • Proxy voting
    • Independent Review Committee (IRC) report
    • Passive Foreign Investment Company (PFIC)
  • About us

    Our story

    • Who we are
    • Investment management
    • Leadership
    • News releases
    • In the media

    Sustainability

    • Sustainability
    • Responsible investing
    • Governance & engagement
    • Inclusion at Sun Life Global Investments

    In the community

    • Livebright Scholarship Program
Sign In

  • MySunLifeGIFs access
  • Suncentral access
  • Advisor hub (Sun Life advisors)

  • MySunLifeGIFs access
  • Suncentral access
  • Advisor hub (Sun Life advisors)
Skip to signin Skip to main content Skip to footer
sunlife logo
Sign In
  • Please enter a search term.
  • Products
    • Back
    • Products
    • Products
    • Sun Life MFS Funds
    • Sun Life Granite Managed Solutions
    • Private Investment Pools
    • Sun Life Tactical ETF Portfolios
    • Sun Life Milestone Funds
    • Emerging Markets Funds
    • Private Client Pricing
    • Sun Life Guaranteed Investment Funds (GIFs)
      • Back
      • Sun Life Guaranteed Investment Funds (GIFs)
      • Sun GIF Solutions
      • Sun Lifetime Advantage GIF
      • Sun Life GIFs Investment options
      • Sun Life GIFs Products no longer for sale
    • Payout annuities
      • Back
      • Payout annuities
      • Life annuities
      • Term certain annuities
    • Insurance GICs and Trust GICs
      • Back
      • Insurance GICs and Trust GICs
      • Trust GICs
      • Insurance GICs
  • Performance
    • Back
    • Performance
    • Performance
    • Mutual funds
      • Back
      • Mutual funds
      • Overview
      • Daily prices
      • Performance
      • Ratings
      • Fund codes
    • Segregated Funds
      • Back
      • Segregated Funds
      • Overview
      • Daily prices
      • Performance
      • Ratings
      • Fund codes
    • Insurance and Trust GICs
      • Back
      • Insurance and Trust GICs
      • Rates
  • Insights
    • Back
    • Insights
    • Insights
    • Commentary
    • Investor education
  • Resources
    • Back
    • Resources
    • Resources
    • Segregated funds marketing
    • Payout annuities advisor resources
    • Trust GICs advisor resources
    • Insurance GICs advisor resources
      • Back
      • Insurance GICs advisor resources
      • Superflex/Income Master, Sun GIC Max and GIC - Comparison
      • New applications - Rate commitments
      • Subsequent cheque deposit - Investment instructions
      • Accrued income
      • Adjusted Cost Basis (ACB) - Deferred annuities
      • Annuitization
      • First sixty-day receipt information for Superflex and GIC products
      • General tax info for TFSA
      • Marriage breakdown and removal of spousal designation
      • Non-registered taxation of surrenders or withdrawals for non-residents
      • Non-residents - Non-registered annuity
      • Pension tax credit
      • Tax slip and receipt mailing schedule for all Individual products
      • Withholding tax on withdrawals from an RRSP
      • Withholding tax rates around the world
      • Six things you need to know about Insurance GICs
    • Advisor tools and calculators
      • Back
      • Advisor tools and calculators
      • Series T calculator
      • Granite Managed Solutions proposal tool
      • Investment illustration tool
      • Current income rates
      • Choose your path
      • My SunLifeGIFS tool
      • Investment GIF e-App
      • Retirement Income Navigator
    • Applications and forms
    • Regulatory documents
  • About us
    • Back
    • About us
    • About us
    • Who we are
    • Investment management
      • Back
      • Investment management
      • MFS Investment Mangement
      • Aditya Birla Sun Life Asset Management Company Pte. Ltd.
      • KBI Global Investors
      • Schroders
      • Dynamic Funds
      • BlackRock
      • Lazard Asset Management Canada Inc.
      • SLC Management
      • Crescent Capital Group
    • Leadership
    • News
    • Sustainability commitment
      • Back
      • Sustainability commitment
      • Governance & engagement
    • Responsible investing
      • Back
      • Responsible investing
      • Stewardship
    • Inclusion at Sun Life Global Investment
    • LiveBright Scholarship Program
  • Contact us
  • Select a role
    Back
    Select a role:
    • I am an Advisor
    • I am an Investor
  • CANADA | EN

    Please select your language preference on the right hand side

    Languages - Canada

    • English
    • Français
    Back
    Regions
    Language
    • English
    • Français
  1. Home
  2. Insights
  3. Commentary
  4. Advisor knowledge hub
  5. Learn how GIFs can help your business
Share this:
  • Share this on Facebook
  • Share this on Twitter
  • Share this on Linkedin

Advisor knowledge hub

May 25, 2023

Learn how guaranteed investment funds (GIFs) can help your business

Your corporate clients may not know Sun Life Guaranteed Investment Funds (GIFs) contracts owned at the corporate level offer several attractive benefits for business owners. GIFs are also known as segregated fund contracts.

Learn how guaranteed investment funds (GIFs) can help your business

Canadians want guarantees

  • Two-in-three (66%) Canadians are interested in safer investment options that guarantees income. But, fewer Canadians are taking advantage of annuities (7%) or segregated funds (3%), available from insurance companies.1

Consider GIFs when selecting the appropriate portfolio investment vehicle as you work with corporate clients. A GIF is a life insurance contract that contains investments similar to those mutual funds offer. But, unlike mutual funds, GIFs offer guarantees. These guarantees can protect the value of a corporation’s investments at maturity or death.

Sun GIF Solutions is part of Sun Life Global Investments’ product suite that combines the growth potential of investment funds with the benefits of an insurance contract. Sun GIF Solutions is one product, but for many needs, combining three different series in one flexible contract. Corporations also have the flexibility to access money at any time.2

With Sun GIF Solutions, corporations can:

  • Move some or all of the investments between series,3 and
  • Access the remaining capital, whenever the corporation may need it.3

Series switching

Sun GIF Solutions offers three solutions to meet a corporation’s evolving needs:

1. Investment Series

Grow savings – while enjoying the benefits of protection the GIF contract can provide.

  • Investment flexibility
    Customize the portfolio with a level of risk that the corporate client is comfortable with.
  • Focus on growth
    If corporations want growth-oriented investments, they can allocate up to 100% of their investment to equity funds, leaving the day-to-day investment decisions to leading global portfolio managers who work hard to build investment value.
  • Insurance protection
    Insurance carries a 75% maturity and death benefit guarantee.

2. Estate Series

Protection – and the efficiency of payments to your business may be critical in succession planning.

  • 100% death benefit guarantee
    The death benefit paid will be the greater of the death benefit guarantee or the current market value.
  • Annual reset
    Up to age 80 of the annuitant, the death benefit is reset annually if the market value is higher than the previous guaranteed amount.
  • Diverse, leading fund companies
    Corporate clients can choose from approximately 55 funds and benefit from the investment expertise of leading global portfolio managers, with no restriction on their allocation to equity investments.

3. Income Series

Guaranteed lifetime income – with the flexibility to address all corporate planning needs.

  • Income planning flexibility
    Corporate clients can begin to take lifetime guaranteed income based on the annuitant’s age, commencing as early as age 50, or defer payment until a later age to grow the guaranteed income amount.
  • Series flexibility
    To meet other investment or estate needs, corporate clients can hold assets in the other series’ within Sun GIF Solutions at the same time, and within the same GIF contract.
  • A diverse, income-oriented investment
    The investment fund for the Income Series is Sun GIF Solutions Strategic Income, a conservative fixed income investment that provides access to public and private fixed income solutions and investment strategies typically available only to institutional investors.

The corporation has the flexibility to move from one series to another, as the corporation’s needs evolve. In certain instances, business owners can make the series switch without incurring a taxable disposition.4

They can also create a guaranteed, market-based pension plan inside the corporation, with another GIF contract, Sun Lifetime Advantage GIF. This contract offers the ability to defer guaranteed income for life until desired.

Guarantees

Whether the funds are for retirement planning or for bridging potential downturns in the business, it’s critical that business owners are able to invest as they want, while ensuring that the bulk of the business’ funds are available as needed. Sun GIF Solutions – Estate Series offers a maturity guarantee of 75% of all deposits and a death benefit guarantee of 100% of all deposits (guarantees are reduced proportionately for withdrawals). The death benefit guarantee is eligible for an automatic reset each year until age 80 of the annuitant; if the market value of the contract is higher than the current guarantee amount, the death benefit guarantee will automatically increase to equal the market value.

Tax treatment

From a corporate investor/unitholder’s perspective, there are two sources of income and capital gains/losses to consider:

  1. Fund level - the segregated fund must allocate income and capital gains/losses to its owners/unitholders each year; and
  2. Investor/unitholder level – when an investor/unitholder redeems units, whether it be a systematic withdrawal, one-time withdrawal or for fees, there will be a capital gain or loss.

The following list gives more details about tax the treatment of segregated fund allocations:

  • Interest, dividends and foreign income are fully taxable.
  • Only 50% of the fund’s realized capital gains are taxed. Unrealized capital gains are not taxed until realized.
  • Refundable tax rates vary depending on the type of income. For instance, all income tax payable on Canadian dividend income is considered refundable tax that the corporation can ultimately recover, so long as adequate dividends are flowed through to the shareholder. The personal dividend then received can benefit from the personal dividend tax credit.
  • Lower refundable tax rates apply to interest, foreign income and capital gains. These refundable taxes are recoverable so long as adequate dividends are flowed through to the shareholder.
  • For corporate clients, 50% of the capital gains (the non-taxable portion) will create a credit to the corporation’s capital dividend account (CDA). Amounts posted to the CDA can then be paid to the shareholder as tax-free capital dividends. CDA tax treatment is available only for private corporations that Canadian residents control. It’s not available for public corporations or for private corporations that non-residents control.

Want to know more about the taxation of a non-registered income? Read this article:

Taxation of Non-Registered Income

Investor/owner withdrawals

After a fund level income allocation item (e.g. dividend, interest, etc.) becomes taxable, it is treated as part of the corporate investor/unitholder’s after-tax money invested effectively in the segregated fund.  When corporate investors/unitholders withdraw funds from their segregated fund (systematic or one time) a potential capital gain or loss will be reported from the disposition of the segregated fund units, which are the proceeds of disposition less adjusted cost base (ACB). For tax purposes, a withdrawal is treated as coming proportionately from the ACB and unrealized gains, if any.

When withdrawals by the corporation from the segregated fund are subsequently flowed out to the shareholders in the form of a corporate dividend, they will be included in the income of the shareholders.

Capital loss advantage

Unlike mutual funds, segregated funds can flow net capital losses through to the investor/owner of the segregated fund. That is, capital losses over and above those used to offset capital gains inside the fund may be used directly by the owner of the contract. The owner can apply these losses against other capital gains in the same year, or carry back such losses up to three years, or forward indefinitely. This unique feature creates additional tax planning opportunities. This segregated fund advantage ties in with the notion of investing in a greater proportion of equity-based funds due to consumer confidence in the underlying guarantees.

Adjusted Cost Base (ACB) tracking

With Sun Life GIFs, the insurance company keeps track of each unit holder’s ACB. When units are redeemed, Sun Life Financial will calculate the realized gain or loss and report this on the investor’s T3 form. As such, there is no need to spend time tracking ACB or contract an accountant to do so.

Additional considerations & Structure flexibility

Although Sun Life GIFs is an insurance contract, it won’t create a material credit to a corporation’s CDA when the annuitant/insured person dies, as it is potentially the case with a corporately owned life insurance policy. However, the contract structure ensures that proceeds flow to the desired beneficiary at the appropriate time.

For a corporately owned Sun Life GIFs contract, should the beneficiary be an individual, the death benefit would create an unintended, fully taxable benefit at that time. As such, the appropriate corporate entity needs to be chosen as the beneficiary.

Protecting wealth and privacy – with the peace of mind that comes from a strong, stable organization

You can trust Sun Life Global Investments to help corporate clients grow their wealth and enhance their tax efficiency.

Security, expertise, and solutions to fit your situation

Founded in 1865, Sun Life has helped Canadians manage and grow their assets for over 150 years. The following reasons can give you confidence that your money is safe with Sun Life, and that we have the expertise and solutions to focus on meeting your needs:

Financial strength, disciplined risk management

  • International financial services provider with total assets under management of $1.326 trillion5
  • One of Canada’s oldest, most trusted financial institutions, recognized for sustainability and proven, disciplined risk management, which was named one of the 2023 Global 100 Most Sustainable Corporations in the World

Investment management expertise

  • Investment funds from world class global portfolio managers
  • Focus is on risk management through experience, insight and innovation

Suite of products and service

  • Full suite of insurance and investment products

Strong commitment to service excellence

1 Results from Ipsos polls conducted in February 2021 and March 2022. 

2 Note that withdrawals will affect guarantees. 

3 Some restrictions apply. 

4 Moving from one series to another series will affect lifetime guaranteed income. 

5 As at Dec. 31, 2022.

Related articles

Tax-loss harvesting: How to generate tax alpha
Are your Clients investing with their legacy in mind?
Clients need your help to protect and pass on their legacy – their way
Learn how guaranteed investment funds (GIFs) can help your business
Resources
  • Stay Diversified

  • Advisor tools and calculators

  • Fund reviews

Questions?
  • Contact us page

    Get in touch with us.

Quick links

  • Advisor sign-in
  • Client sign-in
  • Find a form
  • Newsroom
  • Rates

Regulatory Documents

  • Fund Facts
  • Information folders & contracts and supplements
  • Management Reports of Fund Performance and Quarterly Portfolio Disclosure
  • Simplified Prospectus
  • Proxy voting
  • Independent Review Committee report
  • Passive Foreign Investment Company (PFIC)

Plan sponsors, consultants & group advisors

  • Institutional investor site

Contact us

  • For all questions and inquiries, please contact us
  • Follow us on LinkedIn

SLGI Asset Management Inc. is the investment manager of the Sun Life family of mutual funds.  Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the fund’s prospectus. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

Sun Life Assurance Company of Canada is the issuer of accumulation annuities (insurance GICs), payout annuities and individual variable annuity contracts (segregated fund contracts).  Any amount that is allocated to a segregated fund is invested at the risk of the contract owner and may increase or decrease in value.  Sun Life Financial Trust Inc. is the issuer of guaranteed investment certificates.

Sun Life Global Investments is a trade name of SLGI Asset Management Inc., Sun Life Assurance Company of Canada and Sun Life Financial Trust Inc. all of which are members of the Sun Life group of companies.

  • Legal
  • Privacy
  • Security
  • Fraud
  • Accessibility
  • Careers

© SLGI Asset Management Inc., Sun Life Assurance Company of Canada, and their licensors. All rights reserved.

Start of modal

Welcome to Sun Life Global Investments

We use cookies to enhance your experience by saving your advisor or investor selection. If you prefer not to accept these cookies, please select "I'd rather not say".
Learn more about our cookie policy.

I am an advisor
I am an investor

I'd rather not say

End of modal