Definition of "Separate Account Charge"

An annual fee in a variable annuity that pays for insurance related charges, such as mortality and expense risks. The mortality portion generally pays for: the guarantee to pay you a lifetime income, even if you live longer than originally estimated; and the guarantee to pay your beneficiary a death benefit, even if it is larger than your account balance. The expense portion pays for the guarantee that your contract expenses won't increase, even if costs are greater than estimated. This charge also pays for distribution costs.