Insurance calculator

Free variable annuity (no surrender) calculator

See the monthly income a variable annuity without surrender charges could pay at an assumed return — a contract that keeps your principal liquid by dropping the early-exit penalty, updated live, as you type.

On this page13 sections

InputsLive

What to compute

First payment (PMT)

Payment growth rate (g)

Discount / return rate (r)

Number of periods (n)

periods

Result

Present value of the growing annuity

$133,316.63

What this growing stream of 20 payments is worth today at a 7% rate.

Present value$133,316.63

Future value$515,893.31

Total nominal paid$268,703.74

Final payment$17,535.06

Estimates only, based on the values you enter. Not financial advice.

Results are estimates. Consult a professional.

Definition

What is a variable annuity without surrender charges?

A variable annuity without surrender charges is a market-invested annuity you can exit without paying a surrender penalty. A standard variable annuity ties up your money: take more than the free amount out during the early years and the insurer charges a surrender fee. A no-surrender (or no-surrender-charge) version removes that penalty, so your money stays liquid. This calculator estimates the level monthly income such a contract could produce from a lump-sum premium at an assumed return — while keeping the option to walk away without a penalty.

It is still a variable annuity: the value moves with the market sub-accounts, unlike a guaranteed fixed annuity, and it accumulates before paying rather than paying at once like an immediate annuity. What changes here is only liquidity — removing the surrender charge is about access to your money, not about how the income is calculated.

SEC Investor.gov: a surrender charge is a fee for withdrawing money during an early 'surrender period'; some annuities, often called no-surrender or level-load products, do not impose one.

Liquidity

What surrender periods and charges are — and what removing them means

When you buy a typical variable annuity, the insurer often pays the selling agent a large up-front commission. To recover that cost if you leave early, the contract imposes a surrender period — commonly 5 to 10 years — during which withdrawing more than a free amount (often 10% a year) triggers a surrender charge. The charge usually starts high and steps down to zero.

Contract year	Typical surrender charge	Effect on early exit
1	7%	Highest penalty to withdraw
2	6%	Steps down each year
3	5%	Still a meaningful cost
4–6	4% → 2%	Penalty fading toward zero
7+	0%	Free to surrender

Source: FINRA and SEC Investor.gov. A representative declining schedule; exact terms vary by contract. A no-surrender annuity skips this table entirely.

Removing the surrender charge buys liquidity, but it is rarely free. No-surrender contracts often pay a lower crediting or sub-account return, or carry a higher ongoing fee, because the insurer cannot recover its costs through a back-end penalty. Weigh the liquidity against that trade-off.

Method

How this calculator models the no-surrender option

This calculator uses the same payout math as the variable annuity — one assumed return converting a premium into level monthly income over the payout period. It does not compute a surrender-charge adjustment, because a no-surrender contract has none to deduct. The practical difference modeled here is simply that you can access your principal without penalty; the income figure reflects your assumed return, not any liquidity discount.

monthly rate r = assumed annual return ÷ 12

number of payments n = payout years × 12

monthly income = premium × r ÷ (1 − (1 + r)^−n)

Worked example

A worked example using the no-surrender variable annuity calculator

Example: a $150,000 premium, fully liquid, at a 6% assumed return

An investor who wants to keep access to their money puts $150,000 into a variable annuity with no surrender charges, assuming a 6% return and income over 20 years. What monthly income does the scenario imply?

Step 1 — Convert the assumed rate and term

The monthly rate is 6% ÷ 12 = 0.005, and the number of payments is 20 × 12 = 240.

Step 2 — Solve the projected income

Monthly income = $150,000 × 0.005 ÷ (1 − 1.005^−240) = $1,074.65, for a projected total of $1,074.65 × 240 = $257,915 over the 20 years.

Step 3 — Remember the liquidity trade-off

The $1,074.65 figure assumes the full 6% return. In practice, a contract that drops the surrender charge may credit less — re-run at, say, 5% and the income falls to about $990 a month. That gap is roughly the price of staying liquid.

$1,074.65 / month — and your principal stays accessible

At a 6% assumed return the scenario pays $1,074.65 a month, with no surrender penalty if you need the lump sum back. The real return — and any haircut for liquidity — depends on the specific contract.

Comparison

With surrender charges vs. without

Choosing a no-surrender variable annuity is mostly a choice about flexibility. Standard contracts lock your money for years in exchange for a potentially higher return or lower stated fee; no-surrender contracts free your money but usually charge for that freedom somewhere.

	Standard variable annuity	Without surrender charges
Early exit penalty	Surrender charge for ~5–10 years	None
Liquidity	Limited to a free-withdrawal amount	Full access to principal
Typical cost trade	Lower ongoing fee, back-end penalty	Higher ongoing fee or lower return
Best for	Long-term buyers who won't touch it	Buyers who may need flexibility

Source: FINRA and SEC Investor.gov. The no-surrender feature shifts how the insurer recovers its costs — from a back-end penalty to ongoing pricing.

Scenarios

When the no-surrender feature is worth it

Good fit: someone who wants market-linked, tax-deferred growth but is not certain they can leave the money untouched for a full surrender period.
Good fit: a buyer who expects to compare or move contracts and wants the freedom to do so without a penalty.
Reconsider: a long-term, set-and-forget investor who will never trigger a surrender charge anyway — they may earn more in a standard or low-cost contract.
Reconsider: anyone who hasn't priced the trade-off; confirm whether the no-surrender version costs you in return or in annual fees.

Removing the surrender charge does not remove the IRS rules. Earnings withdrawn before age 59½ still generally face a 10% federal penalty plus ordinary income tax, even if the contract itself has no surrender fee.

Gotchas

Common mistakes with no-surrender annuities

Assuming no surrender charge means no cost. The liquidity is usually paid for through a lower return or higher ongoing fee — find where.
Confusing the surrender charge with the IRS penalty. They are separate: even a penalty-free contract has the 10% early-withdrawal tax before 59½.
Overpaying for flexibility you won't use. If you would never withdraw early, a surrender-charge contract may simply be cheaper.
Treating the projected income as guaranteed. It is still a variable annuity; the assumed return is a planning input, not a promise.

FINRA — Variable annuities: surrender charges, fees, and what to compare.

Definitions

No-surrender variable annuity definitions

A fee for withdrawing more than the allowed amount during a variable annuity's early years (the surrender period).

The span — often 5 to 10 years — during which a surrender charge applies, usually declining to zero over time.

A contract that imposes no surrender charge, giving full access to principal, typically at the cost of a lower return or higher fee.

The portion (often 10% a year) you can withdraw penalty-free even under a surrender schedule.

A market investment portfolio inside the variable annuity whose performance drives the contract's value.

How easily you can access your money. The no-surrender feature increases it by removing the early-exit penalty.

Accuracy

How accurate is this no-surrender annuity estimate?

This calculator projects income at one constant assumed return and models the no-surrender feature only as the absence of an early-exit penalty. It does not compute a surrender-charge schedule, it does not model market swings, and it does not deduct fees or any return haircut a no-surrender contract may carry. Real liquidity terms, free-withdrawal limits, and pricing trade-offs live in the contract.

Use it to compare scenarios and to picture what liquidity might cost in income — but treat it as an illustration, not a guarantee or financial advice. Read the prospectus for the exact surrender terms and fees, and ask a fee-only advisor whether the no-surrender feature is worth its price for you.

SEC Investor.gov — Annuities investor bulletin (surrender charges and fees).FINRA — Variable annuities investor information.

Questions

Frequently asked questions about the free variable annuity (no surrender) calculator

A variable annuity (no surrender) calculator is a free online tool that helps you variable annuity payout without surrender penalty assumed. Same as variable annuity, default rate slightly higher. It runs entirely in your browser with instant results and no sign-up.

It is a market-invested (variable) annuity you can exit without paying a surrender penalty. A standard variable annuity imposes a surrender charge if you withdraw more than a free amount during the early years; a no-surrender version removes that penalty, so your principal stays liquid. The income is still market-linked and not guaranteed. (SEC Investor.gov: Annuities.)

A surrender charge is a fee for withdrawing more than the allowed amount (often 10% a year) during the surrender period — commonly 5 to 10 years. It usually starts high, around 7%, and steps down to zero (for example 7% in year 1, fading to 0% by year 7). A no-surrender contract skips this schedule entirely.

Usually, yes — indirectly. Because the insurer cannot recover its up-front costs through a back-end penalty, no-surrender contracts often credit a lower return or charge a higher ongoing fee. As an illustration, a $150,000 premium over 20 years pays $1,074.65 a month at 6% but about $990 at 5% — roughly the price of staying liquid.

No. The surrender charge is a contract fee; the IRS 10% early-withdrawal penalty is a tax. Even a penalty-free no-surrender annuity still exposes earnings withdrawn before age 59½ to the 10% federal penalty plus ordinary income tax. The two are separate and the no-surrender feature only removes the first.

It suits someone who wants market-linked, tax-deferred growth but is not certain they can leave the money untouched for a full surrender period, or who may want to compare or move contracts without a penalty. A long-term, set-and-forget investor who would never trigger a surrender charge may earn more in a standard or low-cost contract.

About

About this no-surrender Variable annuity calculator

This calculator runs entirely in your browser — nothing you enter is stored or sent anywhere. It uses the same payout math as a variable annuity and models the no-surrender feature only as the absence of an early-exit penalty: it does not compute a surrender-charge schedule, model market swings, or deduct fees or any return haircut a no-surrender contract may carry. It is a planning estimate, not a guarantee or financial advice.

It is one of our free insurance calculators. Compare the standard variable annuity and the guaranteed fixed annuity calculators, or browse the complete calculators directory.