GIC’s Offer Predictable Investment Returns – and Some Have Insurance Benefits Too
- Author Phil Edney
- Published April 5, 2012
- Word count 641
It’s a rather strange question to be sure, but after experiencing one of the worst economic downturns since the Great Depression, many investors are looking for safe investment products that are capable of producing predictable investment returns. For many, this means investing in guaranteed investment products, such as guaranteed interest Contracts issued by insurance companies (GIC’s) or Guarantees Investment Certificates issued by banks (bank GIC’s).
These guaranteed investment products that earns interest may not seem as appealing or exciting as investing in an emerging market mutual fund or commodity index – the variable chili peppers of the investment world. In fact, to some people, they are uninteresting investments in the same way that broccoli can seem uninteresting when compared to the latest gourmet food trend. We all know that broccoli is very good for you, and it is highly recommended by nutritionists everywhere. But, given the choice between a side of boiled broccoli and a side of roasted garlic "smashed" potatoes, it’s not unusual to find the better-for-you option politely left behind.
Nevertheless, with many stock market indexes reporting negative returns, a little certainty can go a long way towards providing you with more confidence when saving for your retirement. And there is a lot more to today’s insurance GIC’s than many people may realize, making them healthy additions to any well-balanced financial plan.
GIC’s – A Healthy Addition to Every Financial Plan
Diversifying your investments among equities, fixed-income investments and cash has been the cornerstone of sound financial planning strategies for some time. And GIC’s can be a great fit for many investors looking to add more certainty to the fixed-income portion of their portfolio.
GIC’s do offer one very important advantage when compared to other fixed-income investments: they offer a guaranteed interest rate, no matter what the financial markets are doing. This can help to reduce overall investment risk within your portfolio while you’re saving for your retirement years.
The Insurance Advantage
Many investors realize that you can purchase bank GIC’s at your local branch. But did you know you can buy similar investment products offering very competitive rates from insurance companies?
GIC’s issued by insurance companies offer three distinct features that set them apart from bank GIC’s: an estate planning benefit, more extensive potential protection from creditors and tax advantage for non-registered contracts. The estate planning benefit means that if you name a beneficiary other than your estate on the insurance GIC contract at the time of purchase, the proceeds (including interest) of your investment will bypass your estate if you pass away. This is significant because it means that your beneficiaries will receive the proceeds privately* and directly, without administrative charges, while avoiding potential probate** and estate fees.
Insurance-based GIC’s may also protect your personal savings from professional liability. As long as the GIC investment is made before an individual or business runs into financial difficulties, generally the proceeds of the GIC will be protected from creditors with the appropriately named beneficiary. This can be an attractive feature for owners of small businesses or those in any other profession where liabilities have the potential to threaten your personal savings.
- Not applicable in Saskatchewan
** Probate is not applicable in Quebec
For Clients age 65 and older, interest from a non-registered GIC is eligible for the pension income tax credit and pension income splitting.
Say "More Please" to Today’s GIC’s
If you are looking for ways to add more stability to your overall financial plan, speak to your advisor about adding insurance GIC’s to the fixed-income portion of your portfolio. Not only are insurance GIC’s a healthy addition to your financial plan, but with options that include cashable, non-cashable, laddered, escalating rate and equity-linked, today’s GIC’s are a lot more interesting too.
Discovery Insurance and Financial Services, with more than 20 years at Hillside Centre is a locally owned and operated Insurance brokerage. We offer a broad range of insurance and financial products such as home, commercial, auto, life, disability, or critical illness insurance as well as Employee benefit plans.
Article source: https://articlebiz.comRate article
Article comments
There are no posted comments.
Related articles
- SCOFI: Pioneering Venezuela’s Petroleum Industry for Over 65 Years
- To Understand Risk, Start By Asking What You Don’t Know
- How To Make Money On Binance: A Full Guide
- Airbnb Investment 101: Tips for New Hosts in Australia
- Indian Gold Demand Rebounds During Important May Festival
- The Investment Terrain in Crypto, Blockchain, and Web3
- Exploring Bitcoin: Corporate Giants Embrace the Cryptoverse
- The Significance of Static IP Address for Trading
- TYPES OF FOREX REGULATIONS
- Weekly Events: Avalanche & Chainlink Collaboration, CommEx Closure, And More
- Assani Elolo Ronaldo - How Bank Instruments Facilitate Gold Deals
- Crypto News: Mempool Solana Shuts Down, Police Integrate Cardano Into Their Work, WhiteBIT And FC Barcelona Launch New Course
- Is Crypto Entering 2021 Vibes?
- Bitcoin Updates All-Time High In Momentum Amid Its Scarcity
- Analyst Announces Bull Run Start, Cites Stock-to-Flow Strategy
- Weekly Crypto News: Telegram Pays Toncoins, WhiteBIT Is Now TradingView Broker And More
- undetectable banknotes
- Unlocking Financial Success: Why Successful Portfolios LLC is Your Best Advisor
- Are EVs a Threat to the Republic?
- A Deep Look Into Binance: Can It Really Be Trusted?
- Ledger Live - Most Trusted & Secure Wallet - Ledger
- Decoding the Future: Navigating the Crypto Landscape
- Don't Cry for Me General Motors
- Investing in exponential growth stocks: what can you choose
- Leveraging ChatGPT AI for Smarter Stock Market Analysis and Investments
- Shib, Doge, and Pepe Have a New Competitor: The Rise of $FUFU Token
- Unlocking Wealth: The Power of Apartment Syndication in Real Estate Investing
- 6 Reasons to Invest in Bitcoin
- Blockchain and AI Convergence: A New Era of Innovation
- Financial Planning for Small Business Owners: Tips for Success