Variable Annuity Cash Out or Transfer

October 22, 2026
Terry, I am looking for some direction regarding an annuity I currently hold and thinking of moving it into one of 2 Schwab variable annuities or cashing it in.
The annuity is from the Hartford Family of Funds, specifically The Hartford Capital HLS Appreciation fund.
I am 70 years old and purchased this Non-Qualified annuity in 1993 for $ 20,000.
I have taken $127,000 in surrenders, and its current value is about $112,500.
I received a notice of an upcoming meeting on November 5, to vote among other items, a change to reclassify The Hartford Capital HLS Appreciation fund from a Diversified Investment Company to a Non-Diversified Investment Company.
Reading through the information it states that this Hartford Capital HLS Appreciation Diversified fund is currently limited in its ability to own the securities of any single issuer.
It also states that if approved the fund would be permitted to invest a larger percentage of the assets in a single issuer changing it to a Non-Diversified fund, which typically presents a greater degree of investment risk due to its ability to invest a greater percentage of the funds asset and a single insurer and in fewer issuers overall.
Because a Non-Diversified fund can invest more of its assets in a smaller number of issuers, it is more exposed to the risks associated with individual issuer, than a fund that invests more broadly across many issuers including greater share price volatility.
It states “While the change to a Non-Diversified fund classification “May Allow” for potential greater risk, (again the term is “May Allow”), each Fund’s portfolio management team intends to manage the fund using the substantially similar risk and volatility guidelines it has used while managing the fund as a diversified funds.”
So, with this potential approval and potential greater investment risk, I have the option of: cashing in this annuity, paying the tax consequences, and moving the remaining funds to a Schwab position.