Segregated account is an account structure used by insurers to hold assets separate from their general account, often associated with variable life and variable annuity products. Assets in segregated accounts are typically invested in underlying funds chosen by contract owners and are legally segregated for the benefit of those owners, subject to product and regulatory rules. Investment performance, positive or negative, is credited directly to the contract, while the insurer earns fees for administration and risk coverage. Segregated accounts help insulate policy values from the insurer's general creditors in many jurisdictions, though guarantees backed by the insurer may still rely on its overall financial strength.

Advisors discuss segregated account concepts when explaining how variable products differ from fixed or indexed contracts. They note that policyowners bear investment risk in the segregated account but may receive guaranteed death or income benefits from the insurer. Compliance materials emphasize that segregated account performance is linked to market results and that prospectus delivery is required. In some markets, the term is used broadly for accounts that ring-fence assets for specific policyholder groups. Understanding segregated accounts helps advisors clarify both the protections and risks associated with variable life and annuity contracts and why carrier financial strength still matters for guarantees.