Accumulation Units and Subaccounts
An investor who purchases a variable annuity is offered several securities packages in which to invest his premiums, each one representing a wide assortment of investment choices. The chosen securities package is kept in a separate subaccount. The securities are purchased and owned by the insurance company. The investor purchases and owns units of the subaccount. These units are known as accumulation units, because they are acquired during the accumulation period.
An accumulation unit represents an investor’s share of ownership in the separate subaccount. Like a creation unit or a mutual fund share, its unit value chang
