Insurance companies offer a wide range of investment options. These include:
Mutual Funds
RRSPs, RRIFs, LIFs, RESPs, LIRAs
GICs
Segregated Funds
Term Annuities
Life Annuities
Universal Life Insurance
Some Investment options are described below:
Segregated Funds – A segregated fund is an investment fund you hold within an insurance contract. The term “segregated” refers to the fact that your investment is seperated from the general assets of the insurance company. Segregated funds are similar to mutual funds in many respects, they offer professional money managment and diversification. However, they also offer a partial guarantee of capital on maturity, potential creditor protection and proceeds from the contract are paid directly to the beneficiary thus avoiding probate fees. Registered Education Savings Plans (RESPs) – are a way to save for your child's education. Funds within a RESP grow on a tax sheltered basis and if withdrawn for educational purposes the funds are taxed in the child's hands. The federal government matches 20% of your deposits up to $400 per year per child.
Guaranteed Investments – offer guaranteed interest rates and guarantee your principal. They generally require a minimum investment and pay a predetermined interest rate for a stated term. At the end of the stated term the principal and interest are available for reinvestment or withdraw.
Registered Retirement Savings Plan RRSPs – are a great way to invest for your retirement. For tax purposes the funds contributed to an RRSP can be deducted from your income within certain limits. Funds within your RRSP also grow on a tax sheltered basis. Guaranteed or Mutual Fund investments can both be held within your RRSP.
Registered Retirement Income Funds (RRIFs) / Life Income Funds (LIFs) - are investment plans which allow you to transfer money from RRSP or locked in RRSP and receive a regular income. The funds received are treated as taxable income but the remaining proceeds continue to grow on a tax sheltered basis.
