An accumulation unit for which the annuitant has annuitized their contract. This is a sub-account of the retiree's total accumulated annuity. These units represent a fixed share of ownership of the insurer's accounts portfolio.
Investopedia Says:
When an insured person changes from accumulating wealth to spending their savings, they begin to draw on their saved money to finance their retirement. While saving, the insured party has made periodic payments to their life insurance company to purchase shares of ownership of a very large portfolio managed by the insurer. When the insured wants to start taking money out, they convert their total accumulated savings to start paying them their income. In order to accomplish this, the insured party purchases annuity units with the money that was formerly being saved as accumulation units.
Related Links:
These contracts provide a guaranteed income stream. Learn how they work and their benefits. An Overview Of Annuities
Understand what you're getting when buying these. Here we look at differences, advantages and disadvantages. Exploring Types Of Fixed Annuities
