Can creditors reach segregated fund proceeds paid to a named beneficiary after the policyholder's death?

Generally, no. If the beneficiary named on a segregated fund falls within a protected relationship, typically a spouse, child, grandchild, or parent of the person insured, the proceeds paid to that beneficiary are generally shielded from the deceased's creditors, similar to how ordinary life insurance proceeds work, because the payment is treated as passing under the insurance contract rather than through the estate. This protection can matter a great deal where an estate has significant debts, since it can preserve a payout for the named beneficiary that might otherwise have gone toward paying creditors if the money had passed through the estate instead.

That protection isn't unlimited, though. It generally depends on the beneficiary actually falling into one of the protected categories, and on the segregated fund contract being structured as a genuine insurance product with a valid beneficiary designation, rather than the deceased's own estate being named. Naming your estate as beneficiary removes this protection, since the funds then become part of the general estate available to creditors.

If protecting a payout from creditors matters to your planning, review your segregated fund's beneficiary designation with a financial advisor or lawyer to confirm it's structured to achieve that.