ADDITIONAL SURRENDER CHARGE Clause Samples
The Additional Surrender Charge clause establishes an extra fee that a policyholder must pay if they terminate or withdraw from a contract, such as an insurance or annuity policy, before a specified period has elapsed. This charge is typically applied on top of any standard surrender charges and is calculated as a percentage of the amount withdrawn or the policy value. Its core practical function is to discourage early termination of the contract, thereby protecting the financial interests of the issuer and helping to cover administrative costs or losses associated with early withdrawal.
ADDITIONAL SURRENDER CHARGE. If you surrender this Policy for its Net Cash Surrender Value within 15 years of the effective date of an increase in Face Amount or if this policy lapses within 15 years of the effective date of an increase in Face Amount, we will deduct an Additional Surrender Charge from the Policy Account Value. The Additional Surrender Charge has two parts: the Deferred Additional Administrative Charge and the Deferred Additional Sales Charge. The amount of such charge or charges will be shown in the Policy Schedule pages issued when you increase the Face Amount. If you request a reduction in Face Amount within 15 years of the effective date of a Face Amount increase, we will deduct a pro rata Additional Surrender Charge from the Policy Account Value as of the effective date of such reduction. The amount of such pro rata Additional Surrender Charge will be the Additional Surrender Charge applicable to the Face Amount increase multiplied by the amount of reduction in the Face Amount increase divided by the amount of the Face Amount increase as of the effective date of such reduction. We will allocate the pro rata Additional Surrender Charge based on the proportion that your Guaranteed Account Value and the value in your Subaccounts bear to the total unloaned Policy Account Value.