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Guaranteed investment funds (GIFs) in Canada
Grow your money in the market with an insurance contract underneath
What are guaranteed investment funds?
A guaranteed investment fund (GIF) is an insurance contract from a life insurance company that invests your money in a diversified portfolio. It works like a mutual fund, with one key difference: an insurance guarantee wrapped around it.
At the end of your contract term, or when you die, you’re entitled to get back at least 75% or 100% of what you invested, whichever floor you chose. If markets grew your investment above that floor, you get the higher amount. If they fell below it, the insurer covers the gap.
How do guaranteed investment funds work?
Every GIF contract has two parts.
The investment
Your money goes into a professionally managed portfolio: equity funds for growth, bond funds for stability, or balanced funds for a mix. It fluctuates with markets just like a mutual fund.
The insurance contract
It specifies your guarantee level (75% or 100%), your maturity date (typically 10 years), and your named beneficiaries. At maturity or death, the insurer pays whichever is higher: the current market value, or the guaranteed amount.
Why Choose PolicyAdvisor for GIFs?
Our platform is designed to make insurance-based investing easier to understand and complete with less friction.
Speak with advisors who break down your options and help you find the right GIF strategy.
Get tailored advice on guarantees, estate benefits, and risk levels so you can choose a contract that aligns with your priorities.
Apply online with support when you need it.
Explore leading GIF contracts and get help understanding guarantees, structure, and fit.
Get advice without pressure to commit. Explore your options and decide on your own timeline, with no fees to talk to an advisor.
What makes GIFs different from other investments?
The investment works like a mutual fund. What sits underneath it is entirely different.
Capital guarantee
The floor is the whole point. At maturity or death, you receive back whichever is higher: your investment’s current market value, or the guaranteed percentage of what you originally invested. In years like 2008 and 2020, when markets dropped sharply and broadly, that floor would have caught GIF holders before the full impact hit. For anyone who can’t afford to wait out a multi-year recovery, that matters considerably.
All investorsEstate bypass and probate avoidance
Name a beneficiary on a GIF and those assets don’t touch your estate when you die. They transfer directly to the person you named, usually within two weeks of a claim, without going through probate. In Ontario and BC, where probate fees sit around 1.4 to 1.5% of estate value, bypassing probate on a $500,000 GIF saves your family roughly $6,000 to $7,500 in fees.
Estate planningCreditor protection
Under most provincial insurance legislation, GIF assets held with a preferred beneficiary, such as a spouse, child, grandchild, or parent, are generally shielded from creditors. Courts can reverse this in fraudulent transfer situations, so it’s not absolute. But for business owners, incorporated professionals, or anyone with meaningful personal liability exposure, it’s a real layer of protection that no mutual fund can offer.
Business ownersDeath benefit guarantee
Unlike a mutual fund, a GIF includes a death benefit guarantee regardless of when you die during the contract term. If markets have dropped and your GIF is worth less than the guaranteed amount at the time of your death, the insurer tops up the difference before paying your beneficiary. Your beneficiaries receive at least the guaranteed percentage of what you invested, whatever markets happened to do.
Estate protectionGIFs vs. mutual funds vs. GICs
These three products come up together constantly in retirement conversations. Here’s how they actually differ.
| Feature | GIF(Guaranteed Investment Fund) | Mutual fund | GIC(Guaranteed Investment Certificate) |
|---|---|---|---|
| Capital guarantee | 75–100% at maturity or death | None | 100% (deposit insurance) |
| Market exposure | Yes | Yes | No |
| Death benefit | Guaranteed, to named beneficiary | Goes through estate | No |
| Probate bypass | Yes, with named beneficiary | No | No |
| Creditor protection | Possible with preferred beneficiary | No | Limited |
| Resets | Yes | No | No |
| Fees | Higher (typically 1%–3% MER) | Lower (typically below 1% MER) | No MER (returns are fixed) |
| Held in RRSP/TFSA/RRIF | Yes | Yes | Yes |
| Assuris protection | Yes | No | CDIC (separate scheme) |
If you want market growth with a capital floor and estate planning advantages, a GIF is built for that. If you want pure market exposure and lower fees without needing the guarantee, a mutual fund makes more sense. If you want zero market risk and a fixed return, a GIC is the simpler option. None of them is categorically better; they’re tools for different situations.
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Who should consider a guaranteed investment fund?
GIFs aren’t right for everyone. But for the right person, the combination of market access and capital protection is hard to replicate.
Retirees and near-retirees
You want market growth but can’t absorb a major drawdown right when you start drawing income. A GIF puts a floor under that risk. You participate in the upside and stay protected on the downside.
Business owners and incorporated professionals
With a preferred beneficiary named, GIF assets are generally shielded from creditors under most provincial insurance legislation. If your business carries personal liability, this is a meaningful distinction no mutual fund or GIC offers.
Estate planners
You have specific people you want to receive specific assets, quickly, privately, and without probate. GIF assets typically reach beneficiaries within two weeks of a claim, with no public disclosure of amounts.
How to invest in guaranteed investment funds through PolicyAdvisor
Talk to a licensed advisor
Our advisors ask about your goals, timeline, risk tolerance, and estate situation before recommending anything. No pressure, nothing to sign.
Review plans from top insurers
The advisor walks you through GIF contracts from Canada’s leading insurers, comparing guarantee levels, MER structures, fund options, and reset provisions so you can make an informed decision.
Set up your contract
Once you’ve picked a plan, the advisor handles the paperwork: beneficiary designations, guarantee level, fund selection, and contribution structure. Lump sum, regular contributions, or a combination.
Which insurers offer GIFs in Canada?
GIFs and segregated funds are available through Canada’s major life insurance companies. We work with all of them.
Frequently Asked Questions
What is the difference between a GIF and a GIC?
Completely different products despite the similar name. A GIC (guaranteed investment certificate) is a deposit product. You put money in for a fixed term, earn a guaranteed interest rate, and have zero market exposure. A GIF invests in a diversified portfolio with market exposure, but the insurance contract guarantees you back a minimum percentage of your original investment at maturity or death. GICs are issued by banks and credit unions. GIFs are issued exclusively by insurance companies.
Can I hold a GIF inside my RRSP or TFSA?
Yes. GIFs can sit inside an RRSP, TFSA, RRIF, LIRA, or LIF. The tax treatment of those accounts applies alongside the insurance protections of the GIF contract. In a RRIF specifically, the death benefit guarantee means your beneficiaries receive at least what you originally invested, even if you draw down most of the account before dying.
What happens if I withdraw from a GIF before maturity?
You can withdraw, but early redemptions reduce your guarantee on the amount taken out. The redemption is paid at current market value, which may be below your original investment. Some older contracts still carry deferred sales charges for early redemptions, though most newer contracts have moved away from that. If you might need the money before the term ends, that’s worth discussing with an advisor before committing.
How are GIF gains taxed?
In a non-registered account, capital gains, dividends, and interest income are all taxable in the year they’re allocated to your contract, even without a withdrawal. Inside registered accounts, normal registered account tax rules apply. If you’re using a GIF for estate planning, the tax treatment of assets transferred to a named beneficiary on death can differ from assets going through the estate, so a tax advisor is worth consulting on that piece.
Are GIFs protected if the insurance company fails?
Yes. Assuris, Canada’s life insurance compensation organization, protects GIF policyholders if a member insurer becomes insolvent, covering the higher of 85% of the promised benefit or $60,000. That’s a backstop mutual fund investors don’t have. GIC holders have protection under a separate and distinct scheme through CDIC.
What fees should I expect?
The main fee is the Management Expense Ratio, which covers both the investment management fee and the cost of the insurance guarantee. GIF MERs typically run 0.5% to 1% higher than comparable mutual funds. That gap compounds over time, so it’s worth asking your advisor to translate the fee difference into actual dollar terms over your expected holding period. Some contracts also charge for reset options or higher guarantee levels. The gap between GIF and mutual fund fees has narrowed in recent years as more competitive products have come to market.
Can I name multiple beneficiaries?
Yes. You can split the death benefit in any proportion: 50/50 between two children, unequal splits, or specific dollar amounts to specific people. You can also name contingent beneficiaries, who receive the proceeds if the primary beneficiary dies before you do. This kind of control is something a standard investment account doesn’t offer.
Ready to see if a GIF belongs in your plan?
GIFs aren’t right for everyone. But for retirees protecting savings, business owners shielding assets, and anyone with real estate planning goals, the combination of market access and capital protection is hard to replicate any other way.
