The percentage may be reduced or eliminated after the contract has been in force for a certain number of years. Sometimes the charge is a reduction in the interest rate credited. Sometimes the charge is eliminated if the interest rate declared by the company falls below a certain level. The interest rate used to accumulate contract values may never be less than the guaranteed rate stated in the contract. The company may change the current rate from time to time, but it cannot be lower than the guaranteed rate.
Companies differ substantially in their methods of determining the current rate.
Most annuities allow you to surrender your contract if income payments have not yet started. Upon surrender, the contract terminates. The surrender value is equal to your contract value less the surrender charge, if any. This amount could be less than you paid in. Many annuities also provide that you may withdraw a portion of your contract value, under certain conditions, without terminating the contract.