6 advantages to buying an RRSP from an insurance company

6 advantages to buying an RRSP from an insurance company

RRSP season is around the corner and you’re probably wondering which financial institution to turn to with your precious savings? Here are 6 reasons for contributing to an RRSP from an insurance company.

RRSPs offered by insurers and banks are very similar. You put your money in an investment vehicle: Guaranteed interest account or investment funds.

The difference lies in the types of investment funds offered. Banks recommend mutual investment funds, or simply mutual funds, while insurance companies offer segregated funds.

The advantages of segregated funds

How are segregated funds better than mutual funds? Let’s see!

1. Peace of mind, guaranteed!

Segregated funds offered by insurance companies include a capital guarantee. This protection of capital means that your beneficiaries will receive a minimum amount upon your death, regardless of where the market is.

If the financial markets take a major downturn right before your death, the insurer will guarantee a portion of your savings, based on the options you selected.

2. Bankruptcy protection

In the event of bankruptcy or legal action by creditors, the segregated funds for which you designated your spouse or child as a beneficiary may not be seized.

This exemption from seizure is especially attractive to professionals and business owners.

3. Prompt payment

In the event of death, the amount accumulated in the segregated fund (or the guaranteed amount, whichever is higher) is paid directly to the beneficiary, without having to wait for estate settlement.

4. Confidentiality of beneficiary designation

By avoiding probate, where the contents of the will may be known by all, the identity of the beneficiary remains confidential.

5. Variety of excellent investment vehicles

Whether you purchase an RRSP from a bank or an insurer, you’ll have a wide array of investments to choose from:

At SSQ, funds are entirely managed by some of the most reputable investment fund managers, thereby avoiding any conflict of interest.

These managers are carefully selected to offer a broad range of complementary management styles. Their performance and compliance with our investment policies are also monitored on an ongoing basis.

6. Your RRSP is protected in the event of an insurer’s bankruptcy

Did you know that your RRSP is protected should your insurance company go bankrupt?

This coverage is provided by Assuris.

Your advisor, your guide

Your advisor is the best person to guide you through the world of RRSPs.

The advisor will help you determine your investor profile and choose the best funds for your financial objectives.

If you contribute to your RRSP by March 1, 2018, you will be able to deduct the amount from your 2017 tax return.

Note: This blog post is provided for information purposes only. It is not a substitute for professional legal, financial or fiscal advice. For advice specific to your personal situation, always speak with your advisor. SSQ cannot be held responsible for any decision made as a result of reading this blog post.