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 ?
In one newly released annuity that offers a three-year surrender charge period, early surrender charges are limited to two percent in the first two years, and one percent in the third year.
If your client has a long time horizon, then perhaps the best way to get the combination of safety and earnings potential that they want is to buy an annuity with a long surrender charge period.
50% No-lapse protection Specified premium, based on: Accumulated MMGP Surrender Charges-- First year: Surrender Charges-- A full surrender charge Renewal years: will be applied for the first nine years, becoming zero in year 10 (None for CCUL) Security Mutual Life States unavailable AL, CA, MT, VI, Guam, of New York PR (607) 723-3551 Min/Maximum issue age 0/85 www.
According to Barron's Insurance Dictionary, a Market Value Adjustment is "an increase or decrease in the surrender charge of the life insurance policy or annuity contract depending on the current financial markets.
The surrender charge is assessed to reimburse the insurer for costs connected with marketing an annuity, including the commission paid.
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
So, when clients object later on to the surrender charge, you can remind them that liquidity is third on their list of priorities.
In a case of first impression, the Tax Court held that where the profit-sharing plan of an S corporation wholly owned by the taxpayers distributed to them a life insurance policy on their lives, the taxpayers could not reduce the taxable value of the could not reduce the taxable value of the policy by the amount of the surrender charge for purposes of determining their income from the transfer.
Lifetime Protector offers a universal life insurance policy with flexible, lifetime-guarantee premiums, a nine-year surrender charge period, rolling target premiums and many optional riders to increase coverage.
Four primary factors, in addition to the premium, influence the ultimate level of the surrender value in a universal life insurance policy: the surrender charge, the mortality charge, the expense charge, and the credited interest rate.
Fixed interest crediting after the surrender charge period, guaranteed not to go below 1.