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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Accumulation Units

Definition:

Let's say you buy life insurance after seeing just one too many heart-rending commercials. As you pay money on that life insurance policy, you are "accumulating" value in it (duh).

But that accumulation is usually broken into distinct chunks. A chunk or unit might be described as

  • a hundred grand
  • the first 6 months of your policy
  • the first two years

Or something else. These units are known as accumulation units, and they decide what value is there, should you one day bite the proverbial dust. These units are also why someone who has been paying into a life insurance policy for a year will get a smaller payout than someone who has been paying in for twenty years.