Annuity unit

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
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