Question

Which of the following is true about Separate Accounts for insurers?

		Insurers pay a fee to policy holders in order to have access to Separate Account assets.
		Separate accounts are deposit accounts regulated by the FDIC.
		Separate Accounts make up a very small part of insurers’ assets and liabilities.
		Separate Accounts assets can only be invested in a restricted set of very safe investments, such as T-Bills.
		Separate Accounts refer to investments made by policy holders that are exchanged for annuities at some point.

Answer 1

Insurance companies have investment products which can be kept separate from an individual's general insurance investment.Example of such product is variable annuities.The investment under variable annuities is managed as a Separate Account.In the Separate Account payments are made by the Policy holder for the purpose of investing in securities.Variable annuities usually have fixed pay outs, called annuities , starting from a specified future date.

So taking into consideration the above fact,the one which is true is given below :

Separate Accounts refer to investments made by Policy holder that are exchanged for annuities at some point.