What if I decide to surrender (cancel) my annuity contract?

Shawn Plummer

CEO, The Annuity Expert

Most annuities allow you to cancel your contract before the term is up, but at the end of the day, annuities are long-term contracts.

Can I Cancel My Annuity?

Most annuities allow you to cancel your contract before the term is up, but annuities are long-term contracts at the end of the day.

To get out of your contract early, you have to pay the price, so here are your options:

Deferred Annuity Contracts

Deferred contracts consist of fixed, fixed indexed, variable, and DIA/QLAC (pre-annuitization) contracts.

The annuity company will pay you the Cash Surrender Value.

The Cash Surrender Value is equal to the greater of

  • The Accumulated Value less any applicable Withdrawal Charges, plus or minus any applicable Market Value Adjustments less any applicable Premium Bonus Vesting Adjustments; or The Minimum Guaranteed Value.

What Does This Mean?

Basically, this means if you cancel your contract before the agreed term is completed, naturally you would have to accept:

Immediate Contracts and After Annuitizing

If you purchase an immediate annuity or have annuitized a contract, your policy may not be terminated or changed in most scenarios.

Commutation Withdrawal Benefit

However, some products allow a Commutation Withdrawal, which basically is a “one-time” withdrawal from your current contract’s value in case of emergency.

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Related Reading

  • Who is eligible for the surrender of an annuity during the accumulation period may give up their annuities?

Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

The Annuity Expert is an online insurance agency servicing consumers across the United States. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

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