Can I cancel a fixed indexed annuity after I buy it?
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Short answer: Yes. State law gives you a free-look period after you receive the contract. It's at least 10 days in most states and often longer, with 30 days common for replacements or older buyers. You can return the contract during it without a surrender charge. Depending on your state, you get back your premium or your current account value.
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How the free-look period works
The NAIC Buyer's Guide says many states give you a set number of days, usually 10 to 30, to change your mind about an annuity after you receive it. This is called a free look or right-to-return period. Your contract should state it prominently. If you decide you don't want the annuity, you contact the insurance company and return the contract.
FINRA's annuities glossary says the length is set by the state where the annuity is sold and generally ranges from 10 to 30 days, and that you can cancel during it without paying surrender charges.
State law gives you a free-look period after you receive the contract. It's at least 10 days in most states and often longer, and many states require 30 days for replacements or for older buyers. Your contract and your state's rules set the exact number of days, so check both.
Some situations get longer periods. NAIC model rules call for 30 days when an annuity replaces an existing policy (Model #613), and California, for example, requires at least 30 days for buyers 60 and older (Cal. Ins. Code § 10127.10). Check your contract and your state.
What you get back
It depends on your state. The NAIC says you'll either get back all of your money or your current account value. Ask which applies before you sign.
When the clock starts
The period generally runs from when you receive the contract, not when you sign the application. Note the delivery date and the deadline on your calendar.
How to cancel
Follow the instructions in your contract. In general:
- Put the request in writing to the insurance company and keep a copy.
- Return the contract if the instructions ask for it.
- Use a delivery method that gives you proof of the date.
Use the free look to review, not just to cancel
This is your best chance to make sure the contract matches what you were told. Check:
- The cap, participation rate or spread on each strategy, and the guaranteed minimums.
- The surrender schedule, year by year, and the free-withdrawal amount.
- Any rider fee, and whether the income you were shown is net of it.
- Whether there's a market value adjustment.
- If you got a premium bonus, how it vests.
After the free look ends
You can still get money out, but on the contract's terms. The NAIC says most contracts let you take a small amount, usually up to 10%, each year without a surrender charge, and to look for waivers for events such as a death. Above the free amount, a surrender charge applies during the surrender period. The SEC's Investor Bulletin says those periods typically last six to ten years, or even longer.
Example: 10% free withdrawal a year and a 7% surrender charge in year 2. On $100,000, you take out $30,000 in year 2. $20,000 is over the free amount, and 7% of that is $1,400.
How it compares with a CD
If you break a CD early, the bank usually charges an early-withdrawal penalty set in the account terms. With an FIA, the free look gives you a window to back out cleanly.
Questions worth asking
- How many days is my free-look period, and when does it start?
- Will I get back my premium or the account value?
- Where do I send a cancellation request?
Plain-English FAQ
How long is the free-look period on an annuity?
It's set by state law and stated in your contract. It's at least 10 days in most states, often longer, and 30 days for replacements or older buyers in many states. Check your contract and your state's rules.
Will I get all my money back if I cancel?
It depends on your state. You'll get back either your full premium or your current account value. Your contract will say which.
What if I miss the free-look deadline?
You can still take the free-withdrawal amount each year. Taking more during the surrender period usually means a surrender charge.
When does the free-look period start?
Generally when you receive the contract, not when you sign the application. Check the contract for the exact rule.
Ready for your number?
Every contract has its own caps, fees and surrender schedule, so the general rules on this page only go so far. You can get a free one-minute income quote at quote.garycosby.com, and if you choose, talk with one of our licensed agents about how a specific contract works. It's your money and your decision.
More guides
- What is a fixed indexed annuity?
- Can you lose money in a fixed indexed annuity? The 0% floor
- Is an annuity bonus really free money?
Sources
- NAIC, "Buyer's Guide for Deferred Annuities" (2022 edition; checked October 23, 2026). https://content.naic.org/sites/default/files/publication-anb-lp-consumer-annuities-fixed.pdf
- FINRA, "Annuities" investor page (page date not shown; checked October 23, 2026). https://www.finra.org/investors/investing/investment-products/annuities
- SEC Office of Investor Education and Advocacy, "Updated Investor Bulletin: Indexed Annuities" (July 31, 2020; checked October 23, 2026). https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/updated-investor-bulletin-indexed-annuities
- NAIC, Life Insurance and Annuities Replacement Model Regulation (#613) (© 2015; checked October 23, 2026). https://content.naic.org/sites/default/files/model-law-613.pdf
- California Insurance Code § 10127.10 (added by Stats. 2014, Ch. 166; operative July 1, 2015; checked October 23, 2026). https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=INS§ionNum=10127.10
All figures on this page come from the dated sources above. Dollar amounts and percentages labeled Example are illustrations, not rates, quotes or predictions.