Surrender Charge

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Surrender Charge

1. A fee one must pay when canceling a life insurance policy. A surrender charge is levied to encourage a policyholder to remain with the same insurer.

2. A fee one must pay to a mutual fund for selling one's shares within a certain period of time. For example, one may be required to pay a surrender charge if one sells shares in the first year or two of ownership. The surrender charge exists to encourage stability in ownership of the mutual fund; that is, it discourages traders from speculating on the fund.

3. A penalty charge one owes if one makes a premature withdrawal from an annuity, insurance contract, or some other investment vehicles.
References in periodicals archive ?
Accessing cash values may result in surrender fees and charges, may require additional premium payments to maintain coverage and will reduce the death benefit and policy values.
As you well know, each churn generates not only commissions, but also surrender fees and other penalities.
It's possible that VAs have been ignored because of their high asset-based insurance fees and a limited selection of investment options, complex structure, surrender fees and steep commissions.
Investors who "quit" the annuity before a specified period has elapsed could pay hefty surrender fees.
Insurance officials say surrender fees for annuities are higher than other investments because they're meant to be a lifetime investment.
The scam artists lure the seniors to shift their money into inappropriate vehicles with high sales commissions and surrender fees.
Last week players voted by a massive 74-2 majority to reject the changes, which would require them to work more days for the same pay and to surrender fees for media work in return for a one-off payment.
They offer growth potential that is linked to several indices such as the S&P 500 and have a principal guarantee, which means hybrid annuity holders literally cannot lose money provided they don't surrender their contracts during the surrender charge period and incur surrender fees.
By eliminating commissions, surrender fees, and complex insurance features, flat-fee VAs create value dramatically faster than traditional VAs.
Any gain in a variable annuity would be currently taxable, and the product would be less liquid than a mutual fund because of the surrender fees, he said.
Educators participating in the plan will benefit from quality, lower-cost investment options without front-end sales charges or surrender fees.
You need to ask if there are any up front costs involved - or withdrawal cost or liquidation or surrender fees.