Annuities are tax-deferred investments offered through insurance companies. The design of deferred annuities allows you to save money toward retirement, when you are most likely to choose to take an income stream or otherwise pull the money out to use it. Ending an annuity refers to closing the annuity out, or surrendering it. If you surrender an annuity before the contract term surrender period, there might be fees associated with the withdrawal. There are some ways around this.
Find the annuity contract and determine what your annuity "inception date" is. The inception date is the date you opened the contract and deposited money. This should be on the information page of the annuity contract. You might also see a "start date" on the information page. Don't confuse the inception date with the start date; they are entirely different. The start date is the time when the annuity is scheduled to start making payments if you do not elect a payment plan sooner.
Review the surrender period of the contract. Annuities range from three-year to 15-year contract periods. If you are still in the surrender period, determine the percentage of fees you must pay. For example, if you have a seven-year annuity, your surrender charges might look like the following schedule: 7 percent, 6 percent, 5 percent, 4 percent, 3 percent, 2 percent, 1 percent. If you owned the annuity for six years, you would pay 1 percent to pull the money out now. You will want to wait for the next anniversary date to avoid penalty, or see whether you qualify for an exception.
Review the contract for fee-exception clauses. These include "living benefit waivers" such as disability, long-term care or fatal disease. If your annuity has these options, you can pull the money out without surrender fees.