What causes accumulation unit value to change?

What causes accumulation unit value to change?

• A. Premium payments
• B. Market fluctuations
• C. Policy lapse
• D. Insurance charges

Answer: (B)

Accumulation unit value moves with the performance of the underlying investments in the subaccounts. Each unit represents a share of the subaccount’s assets, so when the market goes up or down, the value per unit changes accordingly. Premium payments don’t change the price of each unit themselves; they buy more units at the current price, increasing total accumulation value but not altering the per-unit value. A policy lapse ends or alters the account, and insurance charges gradually reduce value, but the day-to-day change in unit value is driven by market fluctuations.

Accumulation unit value moves with the performance of the underlying investments in the subaccounts. Each unit represents a share of the subaccount’s assets, so when the market goes up or down, the value per unit changes accordingly. Premium payments don’t change the price of each unit themselves; they buy more units at the current price, increasing total accumulation value but not altering the per-unit value. A policy lapse ends or alters the account, and insurance charges gradually reduce value, but the day-to-day change in unit value is driven by market fluctuations.