What is the typical objective of a Separate Account in variable products?

The typical objective of a Separate Account in variable products is to allow for individual investment strategies. Separate Accounts are specialized investment vehicles used by insurance companies to manage the funds of certain products, particularly variable life insurance and variable annuities. This structure enables policyholders to select from a range of investment options that meet their personal risk tolerance and financial goals.

By utilizing a Separate Account, policyholders can invest in various underlying assets such as stocks, bonds, and mutual funds, thereby customizing their investment approach. This feature reflects the nature of variable products, which are designed to provide flexibility and the potential for higher returns by allowing policyholders to participate in the investment growth based on their chosen strategies. This option supports individual preferences in financial planning and investment management.

Using a Separate Account does not involve offering fixed returns, and while it may potentially lead to lower fees depending on the management structure, that is not its primary purpose. Additionally, investments in a Separate Account are subject to market risks and do not come with guarantees, further distinguishing it from fixed products.