Group Life & AnnuitiesQuestion 117 of 315
Which statement about a typical annuity surrender charge schedule is correct?
a.It usually declines year by year and eventually reaches 0%
b.It is a flat percentage that applies forever
c.It only applies to withdrawals after age 59½
d.It is set by the IRS, not the insurance contract
Explanation
Annuity surrender charges typically follow a declining schedule such as 7%, 6%, 5%, 4%, 3%, 2%, 1%, 0%, ending at zero after the surrender period. The schedule is a contract provision, not an IRS rule.
Law Reference: Cal. Ins. Code §10127.13Practice all 315 questions free — no signup required.
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