Just like with any contract, if you break it early you are charged. The same is true when you have an annuity that you are about to dip into early. They will apply annuity surrender charges when you break the agreement. Here you will understand all you need to know about this so that you are well educated on the manner.

There are two ways which you can break and an agreement and for which annuities surrender charges are applied. The first one would be if you withdrawal money too early. There is normally a period for which they will tell you in the fine print that if you take money out, a charge will be applied. This is the first time that they can charge you.

Now, you can withdrawal after a certain amount of time. However, even then, they can apply annuity surrender charges if you take money out and too fast. Some of you are wondering exactly what this means. Well, it is simple. The way this works is that if you go about and withdrawal too many times, they might charge you.

See, most of the companies allow you to take money out after a certain amount of time and you can withdrawal these for free. However, they normally also have a set amount of times for which you can get these free withdrawals. This is how they can go about to charge you as well.

Some of you might wonder who regulates the amount they can charge you as well as how long until they can charge allowance capitulate charges. There is someone in government who regulates all that. This would be Securities and Exchange Commission. What they had seen in the past was that in many cases, senior citizens were being scammed. This way

How do they determine how much they are going to take from you is a good question to ask. You will find that this is a normal sales charge. With this being said, there are many who just charge you a percentage of the amount that you take out. This is how they determine the annuity surrender charges. This normally will go down after a few years when you are further into your contract. That is the nice thing, but the initial fee for when you first join is relatively high.