Market-Linked Investments - Understanding Principal Protection
Market-linked term investments
A market-linked term investment allows you to harness potential stock market growth without risking the funds you invest.
What is a market-linked term investment?
Guarantee Advantage® is a market-linked term investment. Depending on the product, you can get a guaranteed minimum return at maturity. This type of investment may also provide a potentially higher return within a pre-set range.
You know from the outset that your principal is protected, while benefiting from the potential for higher returns than those offered by a traditional fixed-rate term investment.
MLTI features
- Guaranteed minimum return depending on the product
- Potential for higher returns than a fixed-rate term investment
- In the event of death, 100% principal guarantee with expedited payment to beneficiaries
- No management fees
- Eligible for RRSPs, TFSAs, RRIFs, LIRAs, LIFs (only in Quebec) and non-registered savings plans
- Minimum investment of $500
- Invest up to age 95
Savings protected at all times
In the event of death
Looking to safeguard the assets you’ll leave behind? Want your loved ones to get them quickly without the hassle of settling an estate?
Guarantee Advantage can help meet your needs in the event of death.
- Your capital is 100% protected.
- If you’ve designated beneficiaries, your investment is excluded from your estate.
- The guaranteed principal may be paid to beneficiaries within 5 business days, provided all required documents—such as the death certificate—are received. This helps avoid the cost and time it takes to settle an estate, which can be up to a year.
In the event of bankruptcy
With certain beneficiary designations, Guarantee Advantage can offer valuable protection against creditors.
Ideal for:
- Business owners
- Self-employed individuals
- Professionals (such as doctors, notaries or lawyers)
Why name a beneficiary?
When you name certain types of beneficiaries, the funds you invest may become creditor-proof. In the event of bankruptcy or a lawsuit, this could prevent creditors from seizing your assets. If needed, consult a legal advisor (notary or lawyer) to assess your situation.
Investment options
With Guarantee Advantage, your investments are spread across 4 baskets of securities designed as a secure and reliable investment opportunity:
- Canadian Diversified: 20 major Canadian companies across various industries
- ESG Global Diversified: 20 business securities selected in accordance with our responsible investment policy
- Financials: 8 Canadian financial institutions contributing to the country’s economic growth
- Global Opportunities: 20 companies operating in a variety of sectors and regions
FAQ
What are the terms and rates offered for market-linked term investments?
- The features of market-linked term investments may vary from one campaign to another.
What is the difference between a market-linked term investment (MLTI) and a market-linked guaranteed investment (MLGI)?
- A market-linked term investment and a market-linked guaranteed investment are quite similar. Both investments allow you to benefit from potential market growth while protecting your principal. You can also get a guaranteed minimum return depending on the MLTI or MLGI you choose. The main difference is that a market-linked term investment is issued by a life and health insurer. This means an MLTI offers additional benefits, including expedited payment to your beneficiaries in the event of death and possible protection from creditors, subject to certain conditions.
Source: https://www.desjardins.com/bc/en/savings-investment/market-linked-term-investments.html
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