Last updated: October 25, 2026
Quick Answer
If you take money from an indexed annuity before an index term ends, the annuity may not add all of the index-linked interest for that term to your account. Some annuities credit none of the index-linked interest or only part of it if you take out money before the end of the term.
The percentage that is vested, or credited, generally increases as the term comes closer to its end and is always 100% at the end of the term.
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What happens if I take money out of an indexed annuity before the term ends?
If you take money from an indexed annuity before an index term ends, the annuity may not add all of the index-linked interest for that term to your account. Some annuities credit none of the index-linked interest or only part of it if you take out money before the end of the term.
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Educational content provided by Jeffrey Scott McLeod, LUTC, National Insurance Producer License #558629. This is for informational purposes only and is not a recommendation to buy or sell any annuity. Guarantees are subject to the claims-paying ability of the issuing insurance company. Always consult your own advisor and read the full NAIC Buyer’s Guide. For residents of your state.
Jeffrey Scott McLeod, LUTC — National Producer #558629.
Questions? Contact Jeff@AnnuitiesExplained.org.