In a variable annuity, what is used as the measurement to determine each payment during the payout phase?

In a variable annuity, what is used as the measurement to determine each payment during the payout phase?

• A. Accumulation Units
• B. Annuity Units
• C. Payout Units
• D. Payment Units

Answer: (B)

During the payout phase, payments are determined by Annuity Units. When you annuitize, the accumulated value is converted into a set number of Annuity Units, and each payment is calculated by multiplying the current Annuity Unit value by that fixed number of units. The unit value fluctuates with the performance of the underlying subaccounts, so payments can rise or fall over time. Accumulation Units are used only in the accumulation phase, not for calculating payout amounts, while terms like Payout Units or Payment Units aren’t the standard measurement used in variable annuity payouts.

During the payout phase, payments are determined by Annuity Units. When you annuitize, the accumulated value is converted into a set number of Annuity Units, and each payment is calculated by multiplying the current Annuity Unit value by that fixed number of units. The unit value fluctuates with the performance of the underlying subaccounts, so payments can rise or fall over time. Accumulation Units are used only in the accumulation phase, not for calculating payout amounts, while terms like Payout Units or Payment Units aren’t the standard measurement used in variable annuity payouts.