Which statement about accumulation during unit value is true?

Which statement about accumulation during unit value is true?

• A. Premium payments increase unit value directly
• B. Market fluctuations change the value of each accumulation unit
• C. Accumulation units are fixed in number and value
• D. AIR determines unit value

Answer: (B)

Accumulation unit value moves with how the separate account's investments perform. Each premium you pay buys more accumulation units at the current unit value, so the number of units can increase, but the price per unit (the unit value) is determined by the value of the account’s assets. When markets rise, the unit value goes up; when markets fall, it goes down. This is why market fluctuations change the value of each accumulation unit. Premium payments don’t directly raise the unit value; they just buy additional units at the prevailing price. Accumulation units aren’t fixed in number—they’re created by purchases and reduced by withdrawals, and the unit value itself is set by the account’s investment performance, not by an assumed interest rate (AIR).

Accumulation unit value moves with how the separate account's investments perform. Each premium you pay buys more accumulation units at the current unit value, so the number of units can increase, but the price per unit (the unit value) is determined by the value of the account’s assets. When markets rise, the unit value goes up; when markets fall, it goes down. This is why market fluctuations change the value of each accumulation unit.

Premium payments don’t directly raise the unit value; they just buy additional units at the prevailing price. Accumulation units aren’t fixed in number—they’re created by purchases and reduced by withdrawals, and the unit value itself is set by the account’s investment performance, not by an assumed interest rate (AIR).