What does Annuity Unit mean?

It is an accountancy related procedure, by which there is calculated the amount of the payments a policy holder is entitled to receive. Annuity units usually are part of the insurance company’s proprietorship, and they basically work as dividends in a company.

Annuity Unit explained

It is a little part of a good financial planning, as the person while active and working can save up for later in life. The process of saving implies that the policy holder has paid towards the insurance company with the intent to become proprietor by buying shares. In order to be able to receive payments, the policy holder actually buys annuity units with the saved money. At the moment withdrawal occurs, savings are turned into profit which will generate an income source.