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Annuity Unit Meaning & Definition

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Definition of Annuity Unit

Annuity Unit is an accounting measure used to determine an individual’s proportionate ownership of the separate account during the pay out stage of the contract. The number of annuity units owned by an individual remains constant and their value, which may vary, is used to determine the amount of the individual’s annuity payment.

Applying "Annuity Unit" to Securities Exams:

When an investor in an annuity annuitizes the contract the investor trades in their accumulation units for annuity units. The number of annuity units is the then multiplied the value of the unity to determine the inventor’s monthly payment.

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