As we age, capital preservation becomes a fundamental requirement of our investment portfolios. Strong capital preservation helps us ensure that our estate planning wishes can be realized. Historically, capital preservation has been treated as another word for GIC, but in today's ultra low-rate environment achieving capital preservation through GICs can be costly. Do older investors have any other choice?
Canada Life's Estate Protection program provides a suite of fixed income and balanced segregated fund options to investors between ages 80 and 91. Segregated funds are the life insurance industry's version of an investment fund. Think of them as investment funds with "insurance wrappers" around them.
Part of the insurance wrapper is a death benefit guarantee. In the case of the Estate Protection program, a 100 percent death benefit guarantee is provided on money invested, meaning that upon the death of the policy annuitant, designated beneficiaries are guaranteed the greater of the policy market value of 100 percent of the money invested - adjusted for any withdrawals that may have been made prior to death.
Apart and aside from the death benefit guarantee, the ability to designate beneficiaries allows for the monies to bypass probate tax upon death, making for a more efficient estate settlement. Furthermore, the monies, while invested, are not locked in. Withdrawals may be made from an Estate Protection fund at any time.
From the available balanced fund options, investors can choose to have an equity weight as high as 60 percent. To bring this article around full circle, it is even possible to purchase GICs within the Estate Protection program! Canada Life has been providing insurance solutions to Canadians since 1847.
Is your portfolio estate protected? Talk to your Scrivens advisor for a review and find out.