Separate account

Separate account

A separate account is an account held by an insurance company not in its general account. A separate account allows an investor to choose an investment category according to his individual risk tolerance, and desire for performance. An account may be a generic conservative or aggressive investment allocation, or a specific mutual fund-type account. Some offshore companies allow the account owners to specify the type of separate account to open.

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


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