You may think of insurance companies for products such as life insurance and disability insurance. But, did you know that they also sell investment products to protect your family’s lifestyle? These products are insured or guaranteed, so there is little chance you will lose money.

 

Three investment products you can buy from an insurance company

 

1.  Guaranteed Interest Annuity (GIA)
These work like Guaranteed Investment Certificates (GICs). They pay a set rate of interest. They are insured, up to a certain limit, in case the insurance company cannot pay you back your money. This protection is provided by Assuris, an organization that covers products sold by life insurance companies.

 

2.  Investment funds
Insurers may sell both mutual funds and segregated funds. Segregated funds limit the amount of money you can lose, while mutual funds do not. You can also open a Registered Retirement Savings Plan (RRSP) or a Registered Retirement Income Fund (RRIF) and hold the insurer’s mutual funds and segregated funds inside the plan.

 

Tip: An insurance agent must be registered in order to sell mutual funds. Check before you buy.

 

3.  Annuities
Annuities pay you a steady, guaranteed income for a set period of time or as long as you live. You can use any savings to buy them, including savings from your RRSP or RRIF, or money transferred from your company pension.

 

Tip: When you think about buying products from an insurer, think about the whole mix of investments that you own. Make sure the products you buy from an insurer fit with your larger investment plan.

Remember: Investments from an insurance company have special features that make them safe.

They may not work the same as products you buy from other advisers. Segregated funds, for example, have features that differ from mutual funds, and the fees you pay may be a little higher. These features are there to improve the safety of your investment.