Surrender Charge Deep Dive: 7-Year vs 10-Year — Is the Extra Yield Worth the Lock?

Longer surrender periods generally mean higher rates. But is the trade-off worth it? The pattern in current MYGA rates: - 7-Year MYGA: 7.04% - 10-Year MYGA: typically 0.15-0.25% higher The real question: Is an extra 0.20% worth 3 more years of restricted access? On $200K: 7-Year at current rates: $14K more than principal at maturity 10-Year at +0.20%: $22K more, but locked 3 extra years Difference: $8K for 3 years of illiquidity Consider this: If rates drop over the next 2-3 years, the 10-year holder locks in today's higher rate for longer. If rates rise, the 7-year holder can reinvest sooner. For clients over 70, the 7-year is almost always the right call. For younger retirees, it's a genuine debate.