One way of recouping expenses under a unit linked contract is to issue two types of unit: Capital Units, purchased by 'new' contributions and which bear a heavy charge or deduction for a defined period, and Accumulation Units, purchased by existing contributions after the end of the capital unit period, when the charges are reduced.
The term used to identify ownership shares in a variable annuity's separate-account fund. When a person pays premiums for a variable annuity, those premiums are credited to the purchaser's account as a certain number of accumulation units. After the accumulation period ends, the accumulation units are used to buy annuity units. See also annuity units.
Any interest earned or dividends paid to shareholders are automatically reinvested into the fund, this increases the value of the units held.
A type of unit trust for investors who do not want to receive income. The income is rolled up into the price of the units. Holders of income units, on the other hand, receive regular dividend cheques so the price of their units is lower.
The mechanism used to account for the insured's deposits in a variable annuity contract during the premium paying period. The number of units purchased depends upon the current valuation of a unit in dollars.
These units reinvest the income a Unit Trust earns, instead of paying it out to investors as an income. Policyholders get the benefit through the increased value of the fund.
The designation given to unit trusts where income is re-invested and not paid out.
Unit trusts that reinvest income. This increases the value of your investment with interest that is not paid out.
A type of unit in which any income is added to the value of the units. Designed for people who prefer their income to be reinvested. Only available on a limited number of funds.
The term used to express ownership shares in a variable annuity's separate account fund. The premiums paid by the purchaser of a variable annuity are credited to the purchaser's account in this form.
Ownership shares in a separate investment account during the accumulation period of a variable deferred annuity.
These are issued to owners of variable annuities during the accumulation period, as evidence of the annuitant's participation in the separate account. (AN)
One type of unit offered in a unit trust, which automatically reinvests income.
A type of unit or share that provides the facility for the automatic reinvestment of income earned from the underlying portfolio. The number of Accumulation units does not change as income is reinvested. In the case of UK domiciled funds, income is reinvested on a net (after tax) basis. For funds based in offshore domiciles, reinvestment is normally transacted on a gross basis: the liability of individual investors to tax being determined by their country of residence.
The shares of ownership you have in a variable annuity contract during the period you are saving for retirement. As you pay additional premiums, you buy additional units.
Unit trusts or life assurance funds where interest or dividends are reinvested to increase the value of your investment, rather than paid out as income.
Normally applied to unit trusts or unit-linked life assurance funds where interest and dividends are rolled up or automatically reinvested to increase the unit value. In the case of unit trusts, income tax is still payable on the reinvested income. In the case of some long-term unit linked life assurance policies, units may be divided between initial units, from which the life assurance company takes charges, and accumulation units, where only fund management and not initial charges are taken.
In a variable annuity contract, if you allocate your Premium Payments to any of the subaccounts, we will convert those payments into Accumulation Units in the selected subaccounts. Accumulation units are valued at the end of each Valuation Day and are used to calculate the value of your Contract prior to Annuitization.
