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.