Annuity unit

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Annuity Unit

Shares in an annuity. When one purchases an annuity, one purchases a fixed number of annuity units, which are set to represent the value of the portfolio in which the annuity invests. When one begins to receive payments from the annuity, this has the effect of selling annuity units so the annuitant may receive cash from them.

Annuity unit.

Annuity units are the shares you own in variable annuity subaccounts, also called annuity funds or separate account funds, during the period you're receiving income from the annuity.

The number of your annuity units is fixed at the time that you buy the income annuity contract, or when you annuitize your deferred variable annuity.

While the number of units does not change, the value of each unit fluctuates to reflect the performance of the underlying investments in the subaccount. That's why the income you receive from a variable annuity may differ from month to month.

References in periodicals archive ?
Instead, the purchase payment or amount annuitized is used to buy a certain number of annuity units. The process works as follows:
* Finally, the initial income paymentis divided by the value of the annuity unit for each subaccount chosen.
Genworth, which is based in Richmond, Virginia, is in the process of trying to get its ordinary life and annuity units out from under the umbrella of the struggling long-term care insurance business.
Commenting on the transaction, CEO Allan Levine further explained that, as a result of the divestment, both the P&C and the life and annuity units of his company will be more focused on their individual long-term strategies and objectives.
When a variable annuity is annuitized, the contract's accumulation units are exchanged for annuity units. The number of annuity units received depends not only upon the existing accumulation units, but also upon the insurance company's assumptions regarding mortality, dividend rates, and expenses.
If variable benefits are to be received the accumulation units are first exchanged for annuity units. Unlike accumulation units, the number of annuity units then remains constant.
But that too presents a challenge, because the idea of buying "annuity units" may be perplexing, especially to younger workers who may be thinking more about using 401(k)s to save for a house, Plotnick says.
Prudential is making the announcement as some if its competitors are planning or implementing efforts to separate from individual life and annuity units, due to concerns about low interest rates, new accounting rules and new marketing rules.
Genworth Financial announced earlier that it hopes to separate the units that write LTCI coverage from its life and annuity units.
MOST ANALYSTS AND PRODUCERS agreed on the strength and resilience of AIG's mammoth life and annuity units in interviews conducted shortly after AIG said Maurice Greenberg had been replaced as CEO.
The contract owner purchases these accounts in "accumulation units" (for deferred variable annuity contracts) or "annuity units" (for immediate variable annuities).
In other words, the dollar amount of each payment depends on the dollar value of a retirement income unit (also called an annuity unit) when the payment is made.