To potentially qualify for creditor protection, who must be named as a beneficiary of a segregated fund contract?

Question: To potentially qualify for creditor protection, who must be named as a beneficiary of a segregated fund contract?

Answer options:

• The estate of the deceased. ✅ A family class beneficiary (e.g., spouse or child).
• A business partner.
• A registered charity.

Correct answer: A family class beneficiary (e.g., spouse or child).

Explanation: One of the major advantages of segregated funds over mutual funds is that they may offer protection from creditors. For this protection to be likely (under provincial insurance acts), the beneficiary must be a member of the 'family class' (spouse, child, parent, or grandchild) or be an irrevocable beneficiary.