Surrender Charge
Calculate annuity surrender charge after a free-withdrawal allowance.
Description
An annuity surrender charge can apply only to withdrawal above a free allowance.
An annuity surrender charge can apply only to withdrawal above a free allowance. This model deducts the charge from the withdrawal proceeds.1
Calculate annuity surrender charge after a free-withdrawal allowance.
When to use Surrender Charge
Use this tool to calculate annuity surrender charge after a free-withdrawal allowance.
Prepare the supplied policy terms, dates, assumptions or recorded indicators requested. Keep monetary amounts on one currency basis and select the applicable thresholds separately.
How to use Surrender Charge and understand its results
- Prepare the supplied policy terms, dates, assumptions or recorded indicators requested. Keep monetary amounts on one currency basis and select the applicable thresholds separately.
- Enter accountValue, withdrawalAmount, freeWithdrawalAmount, surrenderChargePercent using the field table and calculation rules, then run the tool.
- Read chargeableWithdrawal, surrenderCharge, netWithdrawal, remainingAccountValue. The explanation below defines the units, signs, ordering and any flags or placeholder values.
- If the tool reports an input issue, correct the values and run it again. Apply the stated assumptions when interpreting a successfully returned result.
| Input field | Meaning | Value type; see rules below | Requirement |
|---|---|---|---|
| accountValue | Annuity account value | number; minimum: 0 | Required |
| withdrawalAmount | Withdrawal amount | number; minimum: 0 | Required |
| freeWithdrawalAmount | Free withdrawal amount | number; minimum: 0 | Required |
| surrenderChargePercent | Surrender charge rate (%) | number; minimum: 0; maximum: 100 | Required |
Enter nonnegative account value/amounts, withdrawal no greater than account and rate 0–100. Return chargeable amount, charge, net proceeds and account minus gross withdrawal.
chargeable=max(0,withdrawal−free); charge=chargeable×rate/100 Units, indexing, boundary conditions and exceptional cases are defined in the calculation rules above.
| Output field | Meaning | Value type |
|---|---|---|
| chargeableWithdrawal | Chargeable withdrawal | number; minimum: 0 |
| surrenderCharge | Surrender charge | number; minimum: 0 |
| netWithdrawal | Net withdrawal | number; minimum: 0 |
| remainingAccountValue | Remaining account value | number; minimum: 0 |
{
"input": {
"accountValue": 100000,
"withdrawalAmount": 20000,
"freeWithdrawalAmount": 10000,
"surrenderChargePercent": 5
},
"output": {
"chargeableWithdrawal": 10000,
"surrenderCharge": 500,
"netWithdrawal": 19500,
"remainingAccountValue": 80000
}
}Limitations and assumptions
No taxes, market-value adjustment, contract schedule or transaction is supplied. The free allowance is caller-defined.
Numeric inputs must be finite. Follow the calculation-specific rules for overflow, underflow and exceptional cases. Missing required fields, extra fields, wrong value types and violations of the calculation rules are input errors.
Alternative or Complementary methods
Use Indexed-Annuity Credit: Apply participation, cap, and floor to an indexed-annuity return. For a complementary task, use Adjuster Fee Cap: Apply a caller-supplied public-adjuster fee rate and cap.
References
-
Surrender Charge — tool.io
Similar or alternative tools
- Indexed-Annuity Credit
Apply participation, cap, and floor to an indexed-annuity return.
- Adjuster Fee Cap
Apply a caller-supplied public-adjuster fee rate and cap.