Segregated Funds

Segregated Funds (Seg's) are a type of investment fund administered by Canadian Life Insurance companies in the form of an individual annuitant, (Owned personally or corporately).  Guaranteed life insured contracts offering certain guarantees to the policyholder such as reimbursement of capital upon death or surrender.

As required by law 75% on surrender (Cashed in) of the principal deposit is guaranteed. Today some companies are guaranteeing 100% of principal deposit.

Seg's are fully segregated from the company's general investments of the carrier, and do not form part of that company’s assets, but rather are "owned" by the unit holders. 

A segregated fund is an investment fund that combines the growth potential of a mutual fund with the security of a life insurance policy. Like mutual funds, segregated funds consist of a pool of investments in securities such as bonds, GIC's and Seg funds. The value of the segregated fund fluctuates according to the market value of the underlying securities.

What have you learned?

The investor is a unit holder of a segregated fund contract. Not the Insurance Company. If that carrier fails, it's the unit holders that own that fund. 

Here's and example from one Canadian Life Insurance Comany:
Addendum to ecoflextra.pdf