When are accumulation units converted into annuity units?

Accumulation units are converted into annuity units at the time of annuity payout because this is the point when the annuitant begins to receive regular benefit payments from the annuity contract. The conversion reflects the accumulated value of the investment in the annuity during the accumulation phase, translating it into a series of periodic payments during the payout phase.

This process is crucial because accumulation units represent a share of an investor's accumulated value in the annuity, while annuity units determine the actual dollar amount of annuity payments the individual will receive. The value of these units can vary based on factors like investment performance and the life expectancy of the annuitant.

The other contexts mentioned don't align with this conversion process. At the beginning of the policy, the focus is on accumulating values rather than paying out. Policy renewal does not trigger a conversion, and the end of the fiscal year has no direct relation to individual annuity payouts. The defining moment for this conversion is indeed when the annuity begins to make payments.