Indexed AnnuitiesIntroducing Indexed Annuities from the
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Can You Sell Your Annuity?If you buy an annuity and then decide you want to get out of the contract, you don't sell the annuity, rather you surrender it to the insurance company. Most companies charge you a surrender fee if you decide to get out of or sell your annuity within the first seven to eight years of owning it. The shorter amount of time you are in the annuity, the more you'll pay in surrender fees.If you want to switch one annuity for another, you don't sell the annuity, but you can complete the transaction without paying taxes. Exchanging one annuity for another is known as a 1035 exchange (named after Section 1035 of the federal tax code). In a 1035 exchange, you can exchange a life insurance policy for another life insurance policy, an annuity for another annuity, or a life insurance policy for an annuity without paying taxes. In summary, if you want to change your asset allocation, you don't sell an annuity as you would a mutual fund, but you can make arrangements to obtain funds for it by surrendering it.
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