What is a 'Separate Account'

A separate account is a privately managed investment account opened through a brokerage or financial advisor that uses pooled money to buy individual assets.

2. In the context of variable annuities, these are payments made to an insurance company for the purpose of investing in securities. These securities are kept separate from the insurer's general investments.

BREAKING DOWN 'Separate Account'

1. This differs from a mutual fund because the investor directly owns the securities instead of owning a share in a pool of securities. Most separate accounts require a minimum investment of $100,000 or more.

RELATED TERMS
  1. General Account

    The account where an insurer deposits premiums from the policies ...
  2. Pooled Funds

    Funds from many individual investors that are aggregated for ...
  3. Variable Annuity

    An insurance contract in which, at the end of the accumulation ...
  4. SEC Form N-3

    A filing with the Securities and Exchange Commission (SEC) that ...
  5. Unitized Fund

    A fund structure that allows investors to pool assets while retaining ...
  6. Commodity Pool

    A private investment structure that combines investor contributions ...
Related Articles
  1. Retirement

    LTC Annuities: 2 Safety Nets In 1

    Pairing insurance and an annuity sounds good, but do you really need this much coverage?
  2. Investing

    Separately Managed Accounts: A Boon For All

    We provide an explanation of individual cost basis and the advantages it brings to these accounts.
  3. Investing

    Pooled Funds Minimize Risk and Reward

    Pooled funds combine money from many individuals to invest in vehicles like a mutual fund or a pension fund.
  4. Retirement

    How a Variable Annuity Works After Retirement

    These investments can provide extra income after you retire. Here’s a guide to when and how you will receive the payout.
  5. Financial Advisor

    Variable Annuities: The Good, The Bad and the Ugly

    An in-depth guide to everything you need to know and watch out for with variable annuities.
  6. Investing

    What's a Brokerage Account?

    A brokerage account is a contractual arrangement between an investor and a licensed securities broker or brokerage.
  7. Retirement

    How Are Variable Annuities Taxed?

    Before investing in a variable annuity, discuss your personal financial picture with a knowledgeable financial advisor.
  8. Retirement

    Annuities: How To Find The Right One For You

    Fixed, variable and indexed annuities offer different features. Find out which one fits your needs.
  9. Investing

    Are You Buying Annuities Or Mutual Funds?

    Investing a client's money in variable annuties is becoming a target for criticism.
  10. Retirement

    Who Benefits From Retirement Annuities

    Annuities guarantee some degree of fixed income in retirement. But is the security worth the fees and less favorable tax treatment? How to decide.
RELATED FAQS
  1. How safe are variable annuities?

    Discover more about variable annuities, what they offer individuals entering retirement and what forms of protection are ... Read Answer >>
  2. Are variable annuities a good retirement investment?

    Discover the basics of variable annuities, the positive and negative aspects associated with them, and who is best suited ... Read Answer >>
  3. Are variable annuities safe?

    Discover how several layers of protection are instituted, and how regulatory laws by FINRA and the SEC are utilized to make ... Read Answer >>
  4. What is the difference between a fixed and variable annuity?

    Understand the difference between fixed, variable and indexed annuities, and read a brief summary of their respective risks ... Read Answer >>
  5. How liquid are variable annuities?

    Understand whether variable annuities are liquid. Learn more about the two types of variable annuities and which is more ... Read Answer >>
Hot Definitions
  1. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  2. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  3. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  4. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  5. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  6. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
Trading Center