150 Notes to the consolidated financial statements of Aegon N.V.  Note 2 Other products with account terms that are not fixed or guaranteed are generally measured at the policyholder’s account balance.  Depending on local accounting principles, the liability may include amounts for future services on contracts where the policy  administration charges are higher in the initial years than in subsequent years. In establishing the liability, guaranteed minimum benefits  issued to the policyholder are measured as described in note 2.19 c or, if bifurcated from the host contract, as described in note 2.9. One insurance product in the United States is carried at fair value through profit or loss as it contains an embedded derivative that  could not be reliably bifurcated. The fair value of the contract is measured using market consistent valuation techniques. Life insurance contracts under which the policyholder bears the risks associated with the underlying investments are classified as  insurance contracts for account of policyholders.  b. Life insurance contracts for account of policyholders The liability for the insurance contracts for account of policyholders is measured at the policyholder account balance. Contracts with  unit-denominated payments are measured at current unit values, which reflect the fair values of the assets of the fund. If applicable,  the liability representing the nominal value of the policyholder unit account is amortized over the term of the contract so that interest  on actuarial funding is at an expected rate of return. Life insurance contracts typically include derivative-like terms and conditions. With the exception of policyholder options to surrender  the contract at a fixed amount, contractual features that are not closely related to the insurance contract and that do not themselves  meet the definition of insurance contracts are accounted for as derivatives. c. Embedded derivatives and participation features Other terms and conditions, such as participation features and expected lapse rates, are considered when establishing the insurance  liabilities. Where the Group has discretion over the amount or timing of the bonuses distributed resulting from participation features,  a liability is recognized equal to the amount that is available at the balance sheet date for future distribution to policyholders. Guaranteed minimum benefits The Group issues life insurance contracts, which do not expose the Group to interest rate risk as the account terms are not fixed or  guaranteed or because the return on the investments held is passed on to the policyholder. Some of these contracts, however, may  contain guaranteed minimum benefits. Bifurcated guaranteed minimum benefits are classified as derivatives. In the United States, the additional liability for guaranteed minimum benefits that are not bifurcated is determined each period by  estimating the expected value of benefits in excess of the projected account balance and recognizing the excess over the accumulation  period based on total expected assessments. The estimates are reviewed regularly and any resulting adjustment to the additional  liability is recognized in the income statement. The benefits used in calculating the liabilities are based on the average benefits payable  over a range of stochastic scenarios. Where applicable, the calculation of the liability incorporates a percentage of the potential  annuitizations that may be elected by the contract holder. In the Netherlands, an additional liability is established for guaranteed minimum benefits that are not bifurcated on group pension  plans with profit sharing and on traditional insurance contracts with profit sharing based on an external interest index. These  guarantees are measured at fair value. d. Shadow accounting Shadow accounting ensures that all gains and losses on investments affect the measurement of the insurance assets and liabilities  in the same way, regardless of whether they are realized or unrealized and regardless of whether the unrealized gains and losses  are recognized in the income statement or directly in equity in the revaluation reserve. In some instances, realized gains or losses on  investments have a direct effect on the measurement of the insurance assets and liabilities. For example, some insurance contracts  include benefits that are contractually based on the investment returns realized by the insurer. In addition, realization of gains or  losses on available-for-sale investments can lead to unlocking of VOBA or DPAC and can also affect the outcome of the liability  adequacy test to the extent that it considers actual future investment returns. For similar changes in unrealized gains and losses,  shadow accounting is applied. If an unrealized gain or loss triggers a shadow accounting adjustment to VOBA, DPAC or the insurance  liabilities, the corresponding adjustment is recognized through other comprehensive income in the revaluation reserve, together with  the unrealized gain or loss.  Annual Report 2013