Published
Saturday, July 01, 2006 9:00 AM
by
Chris Ford
The Market Value Adjustment (MVA) in regards to a fixed annuity is defined as an adjustment to the surrender charge schedule upon a full surrender of an annuity.
In an interest rate environment where the new money rate is going down for new premium the surrender charge will decrease. This makes it easier for you to access and roll your money with fewer penalties.
In an interest rate environment where the new money rate is rising for new premium the surrender charge will increase. The increase in surrender charges is to prevent you from "jumping ship" to another insurance company offering a higher rate.