In the annuity context, MVA stands for market value adjustment, a contract feature that adjusts the cash surrender value of a fixed or indexed annuity when funds are withdrawn or the contract is surrendered before the end of a rate guarantee period. The adjustment reflects changes in interest rates between the time the annuity was purchased and the time of withdrawal. If interest rates have risen, the MVA may reduce the surrender value; if rates have fallen, it may increase the value, subject to contract limits. The purpose of an MVA is to align the insurer's investment experience with the timing of withdrawals, allowing carriers to offer more competitive credited rates. While MVAs can benefit or penalize policyholders depending on rate movements, they are typically applied in addition to surrender charges and are explained in the product's disclosure materials and prospectus where applicable.

In practice, advisors encounter MVA provisions when clients want to take larger withdrawals from fixed or indexed annuities with remaining guarantee periods. Carrier illustrations and inforce statements often include current MVA factors, showing how early surrender values would be adjusted. Producers explain that the MVA is not a fee but a market-based adjustment tied to interest rate changes since purchase. When rates have declined, advisors may highlight that the MVA can partially offset surrender charges by increasing the payout. Conversely, in rising-rate environments, the MVA can reduce surrender values, so advisors consider timing and partial withdrawal strategies. Suitability and best interest reviews require clear explanation of MVA mechanics, ensuring that clients understand both the risks and potential benefits of owning an annuity with an MVA feature.