Annuity Unit

Think of this like a way of turning beer into cash. Each beer has a dollar value (duh). Your friend drained the last of his or her case and is desperate need of a brewsky fix. You’ll turn each beer into a unit, put it in a beer unit bank, and convert it to green stuff.

Now let’s apply this to finance. According to U.S. law, an annuity unit is “a measure used in valuing a variable annuity during the time it is being paid to the annuitant.” Basically, this applies to when you’re a wee old wanker and you want to use money you’ve accumulated by way of life insurance. As noted by the Insured Retirement Institute, “annuity units are the units...used to determine the amount of the annuity payment...The amount of the payment is the number of annuity units times the annuity unit value.”

Of course, how many units you get depends upon how much your portfolio is worth. This is why you’ll cash the goods in at a time when your portfolio is soaring (hopefully).