Understand how surrender charges work, when they apply, and strategies to access your money without penalties.
Last updated: January 2026 | Written by licensed CT insurance professionals
Before purchasing an annuity, ensure you won’t need more than 10% annually for 5-10 years.
5-10 Year Period
Typical surrender period length
7-10% Starting
First-year surrender charges
10% Free
Annual penalty-free withdrawal
Waiver Options
Death, nursing home, terminal illness
Example Surrender Schedule
This is an illustrative example. Actual surrender schedules vary by product and carrier.
Ways to Avoid Surrender Charges
Use Free Withdrawal Provision
Withdraw up to 10% of your account value each year without incurring any surrender charges. Plan your withdrawals to stay within this limit.
Wait for Surrender Period to End
After the surrender period expires (typically 5-10 years), you can access your full account value with no penalties.
Nursing Home Waiver
Many annuities waive surrender charges if you’re confined to a nursing home for an extended period (often 90+ days).
RMD Exemption
Required Minimum Distributions from qualified annuities (IRAs) are often exempt from surrender charges, even during the surrender period.
Need Help Understanding Annuity Fees?
Get a clear explanation of annuity costs and find products with surrender terms that match your needs. Free consultation with a licensed Connecticut broker.
Related Annuity Resources
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Content reviewed by Antonucci, Joseph, CT Licensed Insurance Producer #21658409
This information is educational and does not constitute financial advice. Actual surrender charges vary by product and carrier. Review your contract for specific terms.