Which of the following is a separate account charge used to cover investment management?

• A. Mortality expense
• B. Expense risk fee
• C. Investment mgmt fee
• D. Admin fees

Answer: (C)

In a variable annuity, money is placed in a separate account whose assets are managed by investment professionals. The fee that directly pays for this ongoing management is the investment management fee. It specifically covers the cost of selecting and overseeing the underlying subaccounts, not the insurer’s guarantees or administrative tasks. Mortality expense relates to the insurance guarantees and death benefits, the expense risk fee covers potential higher costs from guarantees, and admin fees cover administrative services. Therefore, the separate account charge used to cover investment management is the investment management fee.