What type of financial product typically has death benefits along with an investment component?

Segregated funds are a type of financial product that combines investment opportunities with insurance features, including death benefits. When an individual invests in a segregated fund, they not only benefit from the potential growth of the investments held within the fund, similar to mutual funds, but they also receive a guarantee on the principal investment (under certain conditions) and a payout to beneficiaries upon death. This aspect makes them appealing for individuals looking for both investment returns and a safety net for their loved ones.

The presence of insurance benefits, like the death benefit, provides an added layer of security, as it ensures that the original investment amount or a predetermined percentage of it is transferred to the beneficiaries in the event of the investor's death, regardless of market conditions at that time. This feature distinguishes segregated funds from purely investment vehicles, like index funds or private equity, which do not offer death benefits. Moreover, while endowment funds are linked more to savings and maturity payouts, they do not commonly include market-linked investments in the same manner as segregated funds.