Surrender Charge

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 ?
It also offers flexible premiums that don't extend the surrender period, a five year surrender charge schedule, terminal illness and nursing care riders included at no cost and transparent crediting methods.
A copy of an actuarial memorandum on the compact website shows that purchasers will have a choice between a five-year surrender charge period and a seven-year surrender charge period.
However, you may have to pay an early cancellation fee known as a surrender charge. The federal government will also penalize you if you cancel your annuity before you reach age 59 1/2.
a model-free minimal surrender charge schedule that eliminates the surrender incentive for all account values throughout the whole term of the contract.
In some cases, officials say, insurers appear to have the right to change the contract terms while the contract is in force, or even to change the terms during the period when a contract holder who surrenders a contract must pay a surrender charge.
Client buys and indexed annuity (IA) with a 5 percent GLWB and a 10year surrender charge period.
* In a universal life contract, policy value, accumulated value, or cash value (depending on the insurer's terminology) are the internal policy values before the surrender charge is subtracted; and
A surrender charge and a market value adjustment (MVA) may apply to withdrawals made prior to the end of a term.
District judge Marie Mallon sentenced Vant to 14 days in custody for the failing to surrender charge.
Surrender charges The surrender charge is a declining
The single biggest objection you will ever hear about a variable annuity is the surrender charge. What do you think happens when you tell your prospect that your variable annuity has no surrender charge?