A charge imposed by an insurance company to withdraw funds from an insurance policy or annuity contract. A surrender charge typically will be lowered gradually over time. The surrender charge protects an insurance company from a policy holder removing funds after a commission has been paid to an agent. Surrender Charges typically range from 5 to10 percent declining over 5 to 10 years in a Variable Annuity. Surrender Charges typically range from 10 to15 percent declining over 5 to15 years in a Fixed Annuity.