Accumulation unit

Accumulation Unit

1. In a unit trust, a structure whereby a unit holder automatically reinvests profits from the trust, rather than accepts them as dividends. See also: DRIP.

2. In a variable annuity, the shares that the annuity has purchased with the money the annuitant has invested in it.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

Accumulation unit.

Accumulation units are the shares you own in the separate account funds of a variable annuity during the period you're putting money into your annuity.

If you own the annuity in a 401(k) plan, each time you make a contribution that amount is added to one or more of the separate account funds to buy additional accumulation units.

The value of your annuity is figured by multiplying the number of units you own by the dollar value of each unit. During the accumulation phase, that value changes to reflect the changing performance of the underlying investments in the separate account funds.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
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variable annuity accumulation unit: A unit similar to a share in a mutual fund that represents a share of a contract owner's ownership in the separate account backing the contract during the years prior to the annuity starting date.
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