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The current roller coaster ride in financial markets, marked by unpredictability and volatility, can be a tough pill to swallow for many investors. Some, like those in or approaching retirement, also don’t have the time horizon to ride it out. Advisors are looking for solutions that give their clients access to upside while mitigating downside risk. That’s driving the appeal of segregated (seg) funds.
Seg fund policies allow investors to lock in the value of their capital to protect against market declines while taking advantage of market gains. These funds are like any other investment fund in terms of providing access to a variety of stocks and bonds. The difference is the policies have an insurance guarantee safeguarding most or all the invested capital.¹
“Advisors want to be confident in the solutions they recommend. In today’s highly volatile market, segregated funds are an ideal option for clients seeking both stability and growth,” says Steve Fiorelli, senior vice-president of investment management at Canada Life.
He notes seg funds help advisors guide clients in times like these, build trust and offer differentiated value. In recent times, seg funds have also had lower fees relative to what they used to be, more choices and greater flexibility for coverage.
Canada Life’s suite of seg funds is among Canada’s most comprehensive. Beyond the overarching benefit of capital protection, investors also expect strong performance. Gaining access to world-class subadvisors from across the globe – something that’s typically reserved for institutional clients – has significantly benefited Canada Life’s seg funds. About three-quarters of the seg funds on Canada Life’s shelf are performing above the median over three years.²
The combination of safety plus performance is especially relevant during these times of heightened economic uncertainty and market volatility.
“Our forward-thinking solutions – including Risk-Managed, Sustainable, Target Risk and Index ETF portfolios – are designed to meet clients’ diverse needs,” Mr. Fiorelli says. “Our broad offering of products features best-in-class portfolio management teams from around the world. We take immense pride in our segregated funds’ strong performance. With Canada Life’s robust product range, we offer the strategies that advisors need to guide their clients through challenging markets and achieve financial success.”
Among the clients that can benefit most are pending and current retirees who are seeking broad or targeted risk-mitigated exposures to equities, bonds and alternatives in Canadian, U.S., international and emerging markets.
Show your clients how segregated fund policies can protect their savings and grow their wealth.
“Seniors often use seg fund policies for legacy reasons whereby they can invest for future generations with the capital protected, knowing the beneficiaries will see the money more quickly than passing through the estate,” says Daniel Gremonprez, national vice-president for Wealth Distribution at Canada Life.
Seg fund policies also have benefits for estate planning. As an insurance product, a seg fund policy is not to be considered part of the estate where a beneficiary is named (other than the estate). That avoids probate fees, with assets transferring to beneficiaries privately without public scrutiny.
Mr. Gremonprez adds that business owners, especially professionals, consider seg fund policies because the investments potentially have creditor protection. Increasingly, seg funds are also used by ultra-high-net-worth investors who understand all the benefits and see insurance-protected products as another type of diversification.
Investors have more choice for protections, ranging from 75 per cent to 100 per cent of the invested capital. There are also valuable reset options for a fee; as a fund gains value, investors can reset the protected capital amount higher annually, for example.
Canada Life’s lineup offers fund-of-funds solutions (including lower-fee Index ETF Portfolios) and individual funds. Those range from small- and large-cap equities to sector-specific funds such as technology, to alternative strategies.
For clients, the seg fund suite “ultimately makes long-term growth smoother, allowing them to stay confidently invested for longer,” Mr. Gremonprez says.
That has become even more urgent of late. Mr. Fiorelli adds that Canada Life’s strong product shelf and performance, coupled with easy-to-use digital tools, “ensures advisors can focus on what they do best – providing valuable advice and helping their clients build and protect their wealth.”
Partner with a leader in segregated funds. Reach out to your Canada Life wholesaler today to put these award-winning funds to work for your clients.
Disclaimers:
1Guaranteed values will be reduced proportionally by any withdrawals. Guarantee options vary by fund selection.
2Performance data as at March. 31, 2025 (Morningstar) Using the Canada Life 75/75 Partner Series. For a full list of 4- and 5-star funds, visit Positioned to win – Segregated Funds (canadalife.com). For a full list of award-winning funds, see Canada Life wins at the annual Fundata FundGrade A+ awards (canadalife.com).
The views expressed in this article are as at the date of publication and are subject to change without notice. This article is presented only as a general source of information and is not intended as a solicitation to buy or sell specific investments, nor is it intended to provide tax or legal advice. Prospective investors should review the offering documents relating to any investment carefully before making an investment decision and should ask their advisor for advice based on their specific circumstances.
A description of the key features of the segregated fund policy is contained in the information folder. Any amount allocated to a segregated fund is invested at the risk of the policyowner and may increase or decrease in value. Canada Life segregated funds are available through a segregated funds policy issued by The Canada Life Assurance Company.
Guarantees are less a proportional reduction for withdrawals, including taxes, short-term trading fees and any other applicable charges. In addition to the 100% death benefit guarantee for premiums applied to the policy prior to age 91, estate protection policies provide a maturity benefit guarantee, which is 75% of your premiums applied to the policy prior to age 91. The youngest annuitant must be at least age 80 and no more than age 90 at the time the policy is issued. Please read the Canada Life Estate Protection contract and information folder for further details.
Creditor protection depends on court decisions and applicable legislation, which can be subject to change and can vary from each province; it can never be guaranteed. Your client should talk to their lawyer to find out more about the potential for creditor protection for their specific situation.
In Saskatchewan, executors must disclose all known life insurance policies owned by the deceased including segregated fund policies. They must list the insurance company, policy number, designated beneficiaries and the value at the date of death.
Maturity and death benefit reset option availability varies by policy guarantee level and can only be added at time of application, for an additional fee. Once selected, reset options can’t be terminated. Reset fees vary based on fund selection and are collected annually from the policy.
Canada Life and design are trademarks of The Canada Life Assurance Company (“Canada Life”).
Advertising feature produced by Globe Content Studio with Canada Life. The Globe’s editorial department was not involved.