LunarGuard MVA 5-Year review

Yes, for someone who understands the MVA and is genuinely committing for five years. The locked rate is competitive at both tiers, the carrier is solid, and the terms are straightforward. It is less appealing for anyone who might need early access to principal, because the MVA means exit costs during rising-rate periods can exceed the stated surrender charge alone.

The core case is simple: you want a locked guaranteed rate for five years, you want tax deferral, and you don't need the money until the contract matures. The tiered rate structure is worth noting — at $100,000 or more, the rate steps up meaningfully, which makes this a reasonable destination for a lump-sum rollover or an IRA repositioning. RMD treatment is accommodating, which helps for qualified money.

I think LunarGuard MVA 5-Year fits someone in or near retirement who wants to park a portion of their savings in a fixed guaranteed instrument for five years, is not relying on that money for income during the term, and has enough financial cushion to avoid an early surrender. It suits both qualified and non-qualified money. It is not for someone who values flexibility over yield or who might need access before the five-year mark, because the MVA adds uncertainty to any early exit.

You are buying a promise from AuguStar Life Insurance Company to credit a fixed guaranteed interest rate for five years, with the exchange being that you give up ready access to your principal during that window. There are no index strategies, no riders, no moving parts on the crediting side. The product is as simple as a MYGA gets. The complexity — and the risk — lives entirely in the exit terms: a surrender schedule plus an MVA that adjusts your effective penalty based on market interest rates at the time of withdrawal.

The crediting is a single locked guaranteed rate for the full five-year term. AuguStar uses a two-tier structure: contracts below $100,000 receive one guaranteed rate, contracts at $100,000 or more receive a higher rate. Both rates are locked in at issue and guaranteed through the end of the surrender period. The Guaranteed Minimum Interest Rate is 0.25% annually, which is the floor AuguStar must credit regardless of future conditions — this is a contractual floor, not a practical expectation, but it's the legal minimum.

The secondary feature worth understanding is the free-withdrawal provision. In Year 1, you can withdraw up to 5% of premiums paid without surrender charges or MVA. From Year 2 onward, the free amount is 5% of the prior Account Anniversary Value. That is a modest but meaningful liquidity valve — enough to handle RMDs on a typical qualified account or a small emergency distribution without triggering penalties. It doesn't transform this into a liquid product, but it prevents the contract from being completely locked for five years.

The surrender schedule starts at 9% in Year 1 and steps down 1 point per year through Year 5 at 5%, with no charge after Year 6. The MVA — Market Value Adjustment — is the layer that gets less attention but matters more. The MVA adjusts the effective surrender penalty based on the relationship between current interest rates and rates at the time the contract was issued. If rates have risen since you bought in, the MVA works against you, increasing your effective exit cost beyond the stated surrender charge. If rates have fallen, the MVA can actually reduce your penalty. The practical takeaway: don't buy this product with money you might need before Year 5 unless you're comfortable absorbing a variable exit cost.

RMDs attributable to this contract are accommodated — this is an important detail for IRA money, as forcing a taxable event just to meet a distribution requirement would undermine the whole purpose of holding the contract.

There are no explicit annual contract fees or rider fees here — the product has no riders and charges no administration fee. The cost of the contract is built into the rate structure itself, which is standard for a MYGA. The real tradeoff to name is the MVA. In a flat or falling rate environment it's benign, but in a rising-rate environment it becomes a meaningful additional surrender cost on top of the stated schedule. That's not a hidden fee — it's disclosed — but it's the reason a non-MVA MYGA might be preferable for someone prioritizing downside exit certainty over maximum initial rate.

Legal Entity: AuguStar Life Insurance Company

Parent: Constellation Insurance

A.M. Best Rating: A