Annuity surrender charges are fees charged by the insurance company if you withdraw more than the free withdrawal amount during the surrender charge period. Surrender charge periods typically last 5-10 years. The surrender charge decreases over time and eventually reaches zero. Most annuities allow 10% free withdrawals per year.
Key Points
- Surrender charges: fees for withdrawing more than the free withdrawal amount
- Surrender charge period: typically 5-10 years
- Surrender charge decreases over time and eventually reaches zero
- Most annuities allow 10% free withdrawals per year
- An independent agent can help you understand surrender charges before purchasing