Segregated fund Law and Legal Definition

A segregated fund is a specific type of investment medium held inside a life insurance company. Segregated funds are not life insurance policies. A segregated fund does not have a death benefit. However, a segregated fund can be valuable substitutes for mutual funds held at a bank or other financial institution. The most important advantage with a segregated fund is that they have the ability within them to designate a beneficiary. A segregated fund can bypass the estate, and probate.