Why it earned this rating
Our assessment
LunarGuard 5-Year is a straightforward MYGA with a competitive tiered rate structure and a full-account-value death benefit. The 5-year surrender schedule is longer than some MYGA competitors at the same duration band, and the MVA adds a layer of exit risk that buyers should understand. Those two factors keep it from a higher rating, but the product does its core job cleanly.
The short version
This is a 5-year guaranteed-rate annuity for people who want a CD-like commitment with predictable tax-deferred growth. AuguStar locks in the rate for the full term — 4.75% for deposits under $100,000 or 4.95% for $100,000 or more as of April 2026 — and the account value passes to beneficiaries in full at death. The trade is a 5-year surrender schedule that starts at 9% and a market value adjustment that can add to the cost of early exits. If you have the time horizon, the mechanics are clean. If you might need the money before year five ends, this deserves a closer look before committing.
Key facts
The full review
Is AuguStar LunarGuard 5-Year a Good Annuity?
Yes, for the right buyer. If you want a predictable locked rate for five years with no moving parts, LunarGuard 5-Year does that well. The rate tiers are transparent, there are no rider fees, and the death benefit is straightforward. It is less appealing if you want any chance of accessing more than a small slice of your money before year five, or if you are shopping for index-linked growth potential.
Why Someone Would Buy This Annuity
The main reason to buy LunarGuard 5-Year is certainty. You lock in a rate at issue, that rate does not change for five years, and you know exactly what you are going to get. A secondary reason is the full-account-value death benefit — there is no haircut to heirs, which matters for buyers who treat this as part of an estate plan. The $10,000 minimum also makes it accessible relative to MYGAs with higher entry points.
Who This Annuity Is Best For
I think LunarGuard 5-Year is best for a retirement-age or near-retirement buyer who has money they do not plan to touch for five years and wants the certainty of a fixed rate without the complexity of an FIA or income rider. It works well inside an IRA or non-qualified account as a yield anchor. It is not a good fit for someone who might need to access more than the 5% free-withdrawal allowance before the surrender period ends, or someone who wants market-linked upside.
What You're Really Buying Here
You are buying a five-year insurance contract that credits a set interest rate — nothing more, nothing less. Unlike a fixed indexed annuity, there are no index strategies, participation rates, or caps to evaluate. The rate is declared at issue and guaranteed for the full term. What makes it an insurance product rather than a bank CD is the tax deferral, the death benefit treatment, and the surrender structure. The account grows without annual tax drag until you take withdrawals, and if you die during the term the full account value transfers to your beneficiaries without the surrender charge applying.
How the Core Feature Works
LunarGuard 5-Year credits interest at a fixed declared rate for the full five-year surrender period. As of April 2026, that rate is 4.75% annually for deposits under $100,000 and 4.95% for deposits of $100,000 or more. The rate is guaranteed — it will not be reset mid-contract the way a bank savings rate might be. At the end of the five-year period, you can either withdraw your money, renew, or use the proceeds to fund another annuity contract. There are no index strategies to choose, no crediting method elections, and no ongoing decisions to make once the contract is issued.
Why the Secondary Feature Matters
The full-account-value death benefit is the most meaningful secondary feature here. Many fixed annuities pay the lesser of account value or a minimum guaranteed surrender value at death. LunarGuard 5-Year pays the full account value — so if you die in year two, your beneficiaries receive what the contract has actually earned, not a reduced floor figure. For buyers who are treating this as part of a conservative estate strategy, that distinction is worth noting.
Liquidity and Surrender Schedule
In Year 1, you can withdraw up to 5% of total premiums paid without penalty. From Year 2 forward, the free-withdrawal amount shifts to 5% of the prior anniversary account value. Amounts above those thresholds are subject to the schedule below and — importantly — a market value adjustment (MVA). The MVA means the effective exit cost can be higher or lower than the printed surrender charge depending on where interest rates are when you withdraw. In a rising-rate environment, the MVA will typically work against you, adding to the surrender penalty. In a falling-rate environment it may reduce it. This is standard for MYGA products but is worth understanding before committing.
| Contract Year | Surrender Charge |
|---|---|
| 1 | 9% |
| 2 | 8% |
| 3 | 7% |
| 4 | 6% |
| 5 | 5% |
| 6 | 0% |
Required minimum distributions are treated as RMD-friendly per the spec, meaning IRA holders can take their annual RMD without triggering surrender charges. If you are funding this with qualified money, that is a meaningful practical detail.
Fees and Tradeoffs
There are no base contract fees and no rider fees. The rate you see at issue is the rate you earn — there is no spread being deducted from a higher declared rate to cover costs. The main structural cost is the surrender schedule itself: starting at 9% in Year 1, it is on the steeper end for a 5-year MYGA. Combined with the MVA, an early exit in the first two years could be materially expensive. The product is designed for buyers who genuinely intend to hold for five years; it is not designed for flexibility.
Product snapshot
| Feature | Details |
|---|---|
| Product Type | Fixed Annuity |
| Surrender Period | 5 years |
| Issue Ages | 18-90 |
| Minimum Premium | $10,000 |
| Crediting Methods | Fixed Rate |
| Free Withdrawal | 5% of premiums paid in Year 1; 5% of previous account anniversary value in Years 2+ |
| MGSV | 87.5% of premiums at 1-3% |
| Death Benefit | Full Account Value |
| Income Rider | Not available |
| Premium Bonus | None |
| Availability | Approved in CA. Not approved in NY. |
Carrier snapshot
Legal Entity: AuguStar Life Insurance Company
Parent: Constellation Insurance
A.M Best Rating: A
Final take
LunarGuard 5-Year is a clean MYGA with a competitive tiered rate, no fee drag, and a full-account-value death benefit. For a buyer who has five-year money and wants predictable tax-deferred accumulation, it does the job clearly.
The main caution is the combination of a 9% first-year surrender charge and an MVA. These are meaningful constraints, not minor footnotes. If there is any realistic chance you will need access to more than the 5% annual free-withdrawal amount before the term ends, a shorter-duration MYGA or a bank CD may be the better fit. But if the five-year horizon is genuine and the rate is competitive relative to alternatives at the time you are shopping, LunarGuard 5-Year is a straightforward option worth including in a comparison.