Why it earned this rating
Our assessment
LunarGuard 3-Year is a clean, fee-free short-term MYGA from an A-rated carrier, and its rates are competitive for a 3-year commitment. What keeps it from a higher mark is the 5% free-withdrawal allowance, which is meaningfully tighter than the 10% most short-duration MYGAs offer, and the MVA exposure that makes unplanned early exits more expensive than the nominal surrender charge alone suggests.
The short version
This is a 3-year guaranteed-rate annuity — the annuity equivalent of a mid-term CD, with better tax deferral on the growth. AuguStar guarantees the fixed rate for the full contract period, and there are no base contract fees or rider fees to erode the return. The product is straightforward: lock in a rate, leave the money alone for three years, and walk away clean at maturity. The catch is liquidity. The 5% annual free withdrawal is smaller than most competitors allow, and the MVA means surprise withdrawals can cost more than the face surrender charge implies.
Key facts
The full review
Is AuguStar LunarGuard 3-Year a Good Annuity?
It depends on what you are trying to do with the money. If you have a pool of cash you will not need to touch for at least three years and want a guaranteed return with zero fees, this is a sensible choice. The rate is reasonable, the carrier is A-rated through A.M. Best, and the structure is as simple as fixed annuities get. If there is any meaningful chance you will need more than 5% of the account in a given year during the surrender period, a different product with a more generous free-withdrawal provision would fit better.
Why Someone Would Buy This Annuity
The most straightforward reason is tax-deferred guaranteed growth with no complexity. There are no index strategies to monitor, no rider elections to track, and no annual fees eating into the credited rate. For someone sitting on cash from a CD rollover, a maturing savings bond, or a lump-sum distribution they want parked safely for a few years, a locked 3-year rate from an A-rated insurer is exactly what LunarGuard 3-Year delivers. The wide issue age range — 18 to 92 — also makes it one of the few short-term fixed annuities that can accept premium from older buyers who face age restrictions elsewhere.
Who This Annuity Is Best For
I think LunarGuard 3-Year fits best for conservative retirement savers in their 60s or early 70s who want guaranteed short-term growth on money they will not need before the contract matures. It also works for buyers who are already annuity-heavy on income and just want a place to park principal with no moving parts. Non-qualified money benefits from tax deferral; qualified money benefits from the guarantee without adding income complexity. It is less appealing for anyone who wants consistent access to more than 5% of the account annually, who is shopping primarily for lifetime income, or who wants upside tied to market performance.
What You're Really Buying Here
A MYGA — multi-year guaranteed annuity — is a contract where the insurance company credits a fixed interest rate for the full surrender period. Unlike a bank CD, the growth is tax-deferred until you withdraw, and unlike an FIA, there are no index variables or cap rate changes during the term. When the 3-year period ends, you can surrender the full account value, exchange into a new contract, or annuitize. LunarGuard 3-Year is as close to a pure locked-rate instrument as the annuity world offers. The tradeoff for that certainty is early-exit friction: surrender charges plus a market value adjustment for three years.
How the Core Feature Works
The fixed rate is locked at issue and guaranteed for the full 3-year contract. AuguStar credits two rate tiers: the standard rate applies to premiums below $100,000, and a higher rate applies to premiums of $100,000 or more. Both rates are guaranteed from day one and do not reset annually. According to the source materials dated April 2026, the current fixed rates are 4.30% for the lower band and 4.50% for the $100,000-and-above band. These are current snapshot rates — fixed annuity rates change with new issue cohorts, so a quote at the time of application is the binding number.
Why the Secondary Feature Matters
The nursing home waiver is the secondary feature worth noting here. If the owner is confined to a nursing home or similar long-term care facility after the first contract year, AuguStar may waive the surrender charge so the owner can access the full account value without penalty. This matters because the core risk with any MYGA is getting locked out of principal at exactly the moment a health event creates a cash need. The waiver does not eliminate that risk, but it addresses the most common forced-exit scenario. Confidence on the exact terms of this rider is medium based on the available materials — verify the specific qualifying conditions with AuguStar before relying on it.
Liquidity and Surrender Schedule
The first three contract years carry surrender charges of 9%, 8%, and 7% respectively, dropping to zero in year four. On top of those charges, a market value adjustment — MVA — can increase or decrease the net surrender value depending on how interest rates have moved since the contract was issued. If rates rise after you buy, the MVA will likely work against you, making an early exit more costly than the nominal charge alone implies.
Free withdrawals are limited to 5% of account value each contract year (5% of premiums in year one, 5% of prior anniversary value in subsequent years). That is noticeably below the 10% allowance many competing MYGAs offer. If you need more than 5% of the account in any given year before maturity, expect to pay a surrender charge and absorb MVA risk on the excess. Required minimum distributions are handled on an RMD-friendly basis, which means contract holders drawing RMDs from an IRA should be able to satisfy those obligations without triggering surrender charges — though confirming the exact mechanics with AuguStar is advisable.
Fees and Tradeoffs
There are no base contract fees and no rider fees on LunarGuard 3-Year. The entire credited rate flows through to account value without an annual drag. That is a genuine advantage in a category where some products layer on administration fees.
The real cost is structural. You are trading three years of liquidity for a guaranteed return. The 5% free withdrawal is narrower than alternatives. The MVA means the actual cost of an unplanned exit is interest-rate-dependent and can exceed what the surrender schedule shows. For buyers who treat this money as genuinely untouchable for three years, none of that matters much. For buyers who are uncertain about their cash-flow needs, the tighter terms are a meaningful constraint.
Product snapshot
| Feature | Details |
|---|---|
| Product Type | Fixed Annuity |
| Surrender Period | 3 years |
| Issue Ages | 18-92 |
| Minimum Premium | $10,000 |
| Crediting Methods | Fixed Rate |
| Free Withdrawal | 5% of account value annually (5% of premiums paid in year 1, 5% of prior contract anniversary value in years 2+) |
| MGSV | 87.5% of premiums at 1-3% |
| Death Benefit | Full Account Value if death occurs during accumulation or payout phase |
| Income Rider | Not available |
| Premium Bonus | None |
| Availability | Not for use in CA; Not approved for sale in NY |
Carrier snapshot
Legal Entity: AuguStar Life Insurance Company
Parent: Constellation Insurance
A.M. Best Rating: A
Final take
LunarGuard 3-Year is a sensible short-term MYGA for buyers who want a guaranteed fixed return with no fees and do not need to access more than 5% of the account per year. The 3-year term is short enough to be practical, the carrier carries solid financial strength ratings, and the structure eliminates most of the complexity that makes other annuities harder to evaluate.
The cases where this product falls short are straightforward: buyers who may need meaningful liquidity before year four, who want a 10% free-withdrawal window, or who want to avoid the MVA risk on early exits should look at competing 3-year MYGAs that offer wider liquidity terms. But for buyers with genuine long-term cash who want the simplicity of a locked rate and tax deferral, this is a clean, uncomplicated option.