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.

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.

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RELATED FAQS
  1. Can mutual funds outperform savings accounts?

    A mutual fund can – and should – outperform a savings account. In most cases, it should not even be a close race. Savings ... Read Full Answer >>
  2. Can mutual funds invest in private companies?

    Mutual funds can invest in private companies, which may come as a surprise to many investors. It is rare for a fund to have ... Read Full Answer >>
  3. What are the best ways to sell an annuity?

    The best ways to sell an annuity are to locate buyers from insurance agents or companies that specialize in connecting buyers ... Read Full Answer >>
  4. How are non-qualified variable annuities taxed?

    Non-qualified variable annuities are tax-deferred investment vehicles with a unique tax structure. After-tax money is deposited ... Read Full Answer >>
  5. Can a variable annuity be rolled into an IRA?

    You can roll qualified variable annuities, such as other qualified retirement plan accounts, into a traditional IRA. Non-qualified ... Read Full Answer >>
  6. Are variable annuities subject to required minimum distribution (RMD)?

    Variable annuities are insurance contracts that provide tax-deferred growth of assets that can later generate a guaranteed ... Read Full Answer >>

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