Annuities & Market Value Adjustment - MVA
When interest rates move, your annuity's surrender value can adjust up or down. It's one of the lesser-known features that helps align your contract's value with current market conditions.
What is an MVA?
MVA stands for Market Value Adjustment. It is a provision in certain fixed annuities that may increase or decrease the amount available upon an early surrender or excess withdrawal.
What determines whether an MVA is positive or negative?
The answer is simple: the direction of interest rates after your annuity is issued.
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Rates down = MVA may be positive.
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Rates up = MVA may be negative.
Can an MVA help me?
Yes. If interest rates decline after you purchase your annuity, the MVA may increase the amount you receive if you surrender the contract early.
Can an MVA hurt me?
Yes. If interest rates rise after your annuity is issued, the MVA may reduce the amount you receive from an early surrender or excess withdrawal.
Does an MVA affect me if I keep my annuity to the end of the guarantee period?
No. The MVA is designed for situations where money is taken out before the end of the surrender charge period in excess of contractual "free amounts".
Is an MVA the same as a surrender charge?
No. A surrender charge and an MVA are separate contract provisions. Depending on the contract, both may apply to an early surrender.
Why do some annuities have an MVA?
Because the feature helps insurers manage interest rate risk and often allows them to offer competitive annuity rates.
Are there annuities without an MVA?
Yes, there are. Generally, they will have lower guaranteed interest rates (MYGAs) or lower caps and participation rates (FIAs) to reflect the increased interest rate risk assumed by the insurance company.
Should I be concerned about an MVA?
Not if the annuity matches your time horizon. If you intend to keep the annuity through the guarantee period, an MVA is often less important than the annuity's overall features, guarantees, and rate.
Questions about Market Value Adjustments? With 44 years of annuity experience, I can help you understand how an MVA works and whether an annuity with an MVA is a good fit for your retirement goals.