What type of fixed annuity does NOT guarantee full principal return at surrender?

Market value adjusted annuities are structured in a way that they can have fluctuations in their payout values based on market conditions at the time of surrender. When an annuitant decides to withdraw funds before the end of the term, the insurance company calculates a surrender value that considers the current interest rates and any changes in the market. If the market rates have risen since the annuity was purchased, the surrender value may be less than the principal invested. This means that the annuitant may not receive their full principal back upon surrender, which differentiates market value adjusted annuities from other types of fixed annuities that typically provide a guarantee of the principal return.

In contrast, other annuity types, such as banded rate annuities, multi-year guarantee annuities, and book value annuities, generally assure the full return of the principal upon surrender, making the market value adjusted annuity unique in its potential to return a lesser amount based on external market fluctuations.