Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
Most deferred annuities can be surrendered. Once the contract “annuitizes” or starts paying a monthly income for life, most contracts cannot be surrendered. In reality most deferred annuities are surrendered. The earnings of the plan are tax deferred and might present substantial advantages to the owner.
That is a great question! They can, but it may not be your best option, depending upon how long you've had the annuity. Anytime you surrender an annuity, you will pay some form of fee or charge. ( The insurance company does this to recapture some of the lost income they would have generated, and cover costs.) Your annuity in the first years will have a "surrender period" where these charges are very steep. They do this, as an incentive for you to actually derive a benefit from your annuity. The charges can vary widely, but generally start at 10% plus fees, and gradually reduce as time goes on. If there was a bonus added to your annuity, this amount typically is removed or reduced also. You could stand to lose a big chunk of what you'd invested. If you need quick cash, there are some better ways. If you would like to contact me, I'd be happy to go over this in more detail with you. Thank you for asking!
Agent Owner, Gilmore Insurance Services, Marysville, Washington State
Can a deferred annuity be surrendered? Short answer is yes, but before deciding to surrender you need to check to see if there are any surrender penalties involved. In many cases annuities can have a ten year long surrender window. Also there may be tax implications in the surrender depending on how long you've had it and if you're liquidating vs. transferring.
Regional Marketing Director, Capital Choice Financial Group,
Yes, a deferred annuity can be surrendered but, you may pay withdrawal penalties and, of course, taxes on the amount withdrawn. There are some special circumstances where the penalties for early withdrawal are waived. Most annuities have a 10% free withdrawal allowed and in the case that the policy holder will need convalescent care withdrawal fees are usually waived.
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Most deferred annuities can be surrendered. Once the contract “annuitizes” or starts paying a monthly income for life, most contracts cannot be surrendered. In reality most deferred annuities are surrendered. The earnings of the plan are tax deferred and might present substantial advantages to the owner.