Market value adjustment, often abbreviated MVA, is a feature in some fixed and fixed indexed annuities that adjusts the surrender value of the contract up or down when withdrawals exceeding free amounts are taken during the surrender charge period. The adjustment reflects changes in interest rates since the annuity was purchased. If rates have risen, the MVA typically reduces the surrender amount; if rates have fallen, it may increase the amount received. MVAs allow insurers to better match asset and liability values and can help support slightly higher credited rates for policyowners who hold contracts as intended.

In practice, advisors encounter market value adjustment provisions when illustrating fixed and indexed annuities, especially for clients who may need flexibility. They explain that MVA applies only in certain situations, such as large early withdrawals or full surrenders, and does not affect normal interest credits or guaranteed minimum values. Advisors often show hypothetical examples of how rate movements could change surrender values positively or negatively, reinforcing that the product is best suited for money that can remain invested for the surrender period. During reviews, they check current interest environments to estimate potential impacts if a client is contemplating surrender. By understanding market value adjustment mechanics, producers can set appropriate expectations, compare MVA and non MVA products, and help clients align annuity choices with their time horizon and liquidity needs.