Surrender fees are a fee that is charged if you surrender the annuity prior to the initial contract term.  Some annuities allow you to take partial each year like 10% without incurring a surrender or withdrawal charge.   Typical surrender fees are 10% for a 10-year contract term and each year the surrender fee typically reduces by 1%.  At the end of the initial 10-year term you are no longer subject to a surrender charge. Always make sure you check the annuity to contract so you know what fees and surrender charges are before you sign the application.