Separate Account

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DEFINITION of 'Separate Account'

1. 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.

INVESTOPEDIA EXPLAINS '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.

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