Surrender Period Law and Legal Definition

Surrender Period is a fixed amount of time during which a policy holder retains the major share of his or her investment in an annuity contract without any penalty. Generally, the surrender periods last from five to ten years. Most of the insurance contracts permit to receive at least 10% per annum of the accumulated value of the insurance account during the surrender period. If the amount exceeds the 10% limit, the policy holder is liable to pay a surrender charge on the amount that withdrawn above the specified limit 10%.