The prospect of heading into an economic downturn, or even a recession may be frightening. But during these turbulent times, investors should think about segregated funds contracts (seg funds). They offer ways to protect your investments and estate planning benefits.
What are GIFs (Guaranteed Investment funds)?
March 10, 2021
A key difference is that only insurance companies can offer GIFs. They have benefits that mutual funds don’t, including guarantees and estate planning advantages.
Let’s take a look at Sun Life GIFs terms
Guaranteed investment funds (GIFs) are similar to mutual funds. Both give you a way to take advantage of a large, professionally managed collection of investments. A key difference is that only insurance companies can offer GIFs. They have benefits that mutual funds don’t, including guarantees and estate planning advantages.
GIFs also known as:
- Segregated funds
- Seg funds
- Variable annuities
- Individual variable insurance contracts
Why choose GIFs?
Growth
GIFs let you participate in the markets through investments based on stocks, bonds and index funds.
Sun Life GIFs invest in funds that expert money managers closely watch, with the goal of increasing their value.
Guarantees
Guarantees protect your investment from market declines. The market value of your investment may go up or down, but the amount you or your beneficiary receives won’t go below the guarantee amount.
Legacy
You decide who gets the money if you die before your contract reaches its maturity date. The proceeds from a GIFs contract don’t need to go through your estate, speeding up the process to share your wealth, reducing fees for transferring it to your beneficiary, and providing flexibility if your situation changes.
People
Contract owner
When you buy a Sun Life GIFs contract, you are the owner of the insurance contract.
Annuitant
We pay the insurance benefits based on this person’s life. The contract owner and annuitant could be different people, but only if the contract is non-registered.
Beneficiary
You name a beneficiary to receive the benefits from your Sun Life GIFs contract when the annuitant dies.
Money
Deposits
Money you put into the Sun Life GIFs contract. You can make one-time (lump-sum) deposits or make automatic deposits.
Liquidity
If you need access to your money, you can take it out of your Sun Life GIFs contract. Withdrawals will reduce guarantees.
Guarantees
Maturity benefit guarantee
On the contract’s maturity date, you receive a maturity benefit. It will be the greater of the market value or a percentage of your deposits. This is either 75% or 100%, depending on the contract.
Death benefit guarantee
When the annuitant dies, your beneficiary receives the greater of the market value or the death benefit.
Lifetime guaranteed income
Some contracts offer this feature so that you receive an income for life. With the joint life income option, you and your spouse receive income for as long as you both live.
Legacy
Legacy settlement option
You choose how the death benefit from your contract goes to your beneficiary. You’re in control and can tailor payments to your beneficiary’s unique needs.
Bypass estate and probate
The death benefit that the named beneficiary receives isn’t part of the estate. Your beneficiary receives money from your contract quickly and privately.
Potential creditor protection
In certain situations, debt collectors won’t be able to make a claim against your Sun Life GIFs contract.
Did you know?
84% surveyed choose safety over investment performance.*
Investors are concerned about market risk and their portfolios.
*2018 Global Survey of Individual Investors.
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.
