A: You cannot lose principal due to market downturns — that is the defining feature of indexed annuities. However, two scenarios could result in receiving less than your full deposit: (1) withdrawing more than the free-withdrawal allowance during the surrender period triggers surrender charges that reduce your balance, and (2) in the very unlikely event of insurer insolvency, state guaranty association coverage is limited and may not cover the full contract value. Principal protection applies only to market performance.