What Are Surrenders?
During the accumulation period of a deferred variable annuity contract, the contract owner may surrender the annuity contract and receive a cash payment from the insurance company. This amount is the cash value or cash surrender value of the contract. It equals the sum of premiums and earnings (or losses), minus prior withdrawals and charges deducted. The amount paid on surrender may be subject to surrender charges. Many deferred annuity contracts impose surrender charges only for an initial period after the contract is purchased; others start a new surrender charge period with each premium. Surrender charges usually decline to zero over a period of time, such as five or seven years. A partial surrender is a withdrawal of an amount less than the entire cash surrender value of the contract. Partial surrenders can also be taken as a scheduled series of payments under a systematic withdrawal plan. Partial surrenders may be subject to surrender charges, but many contracts permit annual wit
