What typically happens to the surrender charges in a deferred annuity over time?

In a deferred annuity, surrender charges are fees imposed on the policyholder if they withdraw funds from the annuity before a specified period. Typically, these charges are designed to discourage early withdrawals and are structured to decrease over time. As the annuity matures and the policyholder remains invested, these surrender charges generally decline gradually.

This structure allows for greater access to the funds without penalties as time goes on, which is beneficial for policyholders as they approach maturity or wish to access their capital. Therefore, the correct answer highlights this typical pattern of decreasing surrender charges, which aligns with the design of many deferred annuities to encourage long-term investment.