Surrender period

Deferred annuity contracts are typically subject to surrender periods, which are generally between 5–10 years. Surrender charges for redemption prior to the surrender period average about 1% per year. For example, a deferred annuity with 10-year surrender period might impose a surrender charge of up to 10% in the first year, 9% in the second year, 8% in the third, and so on.