A separate account is an insurer-maintained investment account legally segregated from the insurer's general account and used to support variable life and variable annuity benefits. Policy values in separate accounts fluctuate with the performance of chosen subaccounts (similar to mutual funds) and are generally insulated from the insurer's creditors, subject to contract and law. Separate accounts permit securities-linked accumulation while the general account backs guarantees outside the variable features.

Advisors explain that variable policy values are invested in separate account sub accounts and can fluctuate, while guarantees (if any) depend on the insurer and contract provisions.