How long does the surrender period last?
Use this as a checkpoint before comparing carriers or signing an application.
Insurance terms
Surrender charge
A fee that may apply for taking more than allowed during the surrender period.
Definition
Surrender charge
A surrender charge is a fee in some annuity contracts that may apply if you withdraw more than the contract allows during the surrender period.
- Why it mattersThis is one of the main reasons an annuity needs to be matched to the right time horizon. A contract can be reasonable for money set aside for later and a poor fit for money you may need soon.
- What it is notThis is not a quote, approval, recommendation, or policy promise. The exact meaning depends on the contract and carrier.
- Where to confirm itAsk to see the policy language, rider language, illustration, or contract page that controls this term.
Questions to ask.
A good broker conversation should turn a definition into a practical policy decision.
What free withdrawals are allowed?
Use this as a checkpoint before comparing carriers or signing an application.
Does the charge decline each year?
Use this as a checkpoint before comparing carriers or signing an application.
What emergencies are waived, if any?
Use this as a checkpoint before comparing carriers or signing an application.
Related reading.
Keep the explanation connected to the product you are comparing.