Early withdrawal of funds from an annuity without a bailout provision may result in IRS penalties and:

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Surrender fees are charges levied by the insurance company when an annuity is surrendered before the designated period. These fees are designed to discourage early withdrawals and recoup some of the costs associated with setting up the annuity. In addition to these fees, early withdrawals from annuities without a bailout provision may also result in IRS penalties.

Early Withdrawal of Funds from an Annuity Without a Bailout