Why it earned this rating
Our assessment
LunarLock 3-Year is a clean, no-frills MYGA from a carrier with solid A.M. Best backing, and for a buyer who simply wants a short fixed-rate hold it delivers what it promises. The surrender charges in Year 1 (9%) and Year 2 (8%) are higher than many three-year peers, and the MVA adds meaningful risk if rates move against you before maturity. That keeps the rating in the Good tier rather than pushing higher.
The short version
This is a three-year guaranteed-rate annuity aimed at conservative savers who want a CD-like instrument with better tax deferral. AuguStar locks in a fixed yield for the full three-year term, credits it to your account value, and returns the full balance at maturity. What you're trading is liquidity — early withdrawals trigger steep charges and a potential market value adjustment. If you can hold the full term, the mechanics are straightforward. If there's any chance you'll need the money before year three is up, the penalty math gets painful fast.
Key facts
The full review
Is AuguStar LunarLock 3-Year a Good Annuity?
For the right buyer, yes. If you have money you won't need for three years and want a guaranteed rate with no market exposure, LunarLock delivers that simply and from a carrier with solid credentials. It is not a good fit if you have any realistic chance of needing the funds before the surrender period ends — the early-exit charges are steep for a short-term contract, and the MVA adds an additional layer of uncertainty on withdrawals subject to surrender charges.
Why Someone Would Buy This Annuity
The main reason is certainty. LunarLock guarantees a fixed rate for the entire three-year period, so there are no crediting surprises, no index performance questions, and no participation rate adjustments at renewal. For a buyer parking a CD-maturing or IRA rollover for a defined window, that predictability matters. The broad issue-age range (18-92) and the $10,000 minimum also make it more accessible than some MYGA competitors that require larger premiums or restrict older buyers.
Who This Annuity Is Best For
I think LunarLock 3-Year fits best for someone in or near retirement who is comfortable committing a defined portion of conservative savings for three years — particularly IRA or rollover dollars where RMD access is a concern, since the contract is designed to accommodate required distributions without surrender charges. It is less suited for someone under 60 with liquidity needs, anyone who wants index-linked upside, or a buyer whose time horizon is genuinely uncertain.
What You're Really Buying Here
You are buying a fixed-rate insurance contract, not a bank product. The practical effect is similar to a CD — a set rate, a set term — but the wrapper is different. Interest grows tax-deferred until withdrawal, which matters most in non-qualified accounts. At maturity, the contract can be surrendered, annuitized, or renewed on whatever terms AuguStar offers at that point. The MGSV (Minimum Guaranteed Surrender Value) of 87.5% of premiums accumulating at 1-3% defines your contractual floor — you will not receive less than that if you hold the product to surrender.
How the Core Feature Works
AuguStar credits a single fixed interest rate to the entire account value for the three-year term. The rate was disclosed as 4.25% (standard) or 4.45% (enhanced, presumably for larger premium amounts) as of April 15, 2026. Those figures are a snapshot and will differ for contracts issued later. The guaranteed minimum interest rate — the contractual floor the rate can never fall below — is 0.25% per year. In practice, competitive rates will be far above that floor; the GMIR only matters if the carrier were to enter a severe financial distress scenario.
Interest compounds annually inside the contract. At the end of year three, the surrender charge drops to zero and you have full access without penalty.
Why the Secondary Feature Matters
The most useful secondary feature here is the nursing home rider. If you are confined to a nursing home for at least 90 consecutive days, AuguStar waives the surrender charge on withdrawals during that confinement. For a buyer in their 60s or 70s, that waiver meaningfully softens the liquidity risk of a three-year commitment — if a health event forces a change of plans, you are not hit with a 9% or 8% penalty on top of the medical costs. The death benefit — full account value, not just a floor — is also a clean feature that avoids the complexity of tiered death-benefit bases that some carriers use.
Liquidity and Surrender Schedule
LunarLock carries a three-year surrender schedule, but the charges are steeper than some buyers expect for a short product. Year 1 is 9%, Year 2 is 8%, Year 3 is 7%, and Year 4 (post-maturity) is 0%. That means if you surrender in year one, nearly a tenth of your premium is gone before the MVA is even factored in.
The MVA — Market Value Adjustment — means your effective surrender value also fluctuates based on interest rate movements between your contract date and your surrender date. If rates have risen since you bought in, the MVA will reduce your surrender proceeds further. If rates have fallen, the MVA can work in your favor. It adds a layer of unpredictability that most buyers in a "safe" category don't anticipate.
The free withdrawal provision helps: you can take 10% of premiums paid in Year 1, and 10% of the prior anniversary account value in Years 2 and onward, without triggering surrender charges or MVA. RMD withdrawals required by IRS rules are also not subject to charges, making this workable inside an IRA. But amounts above those thresholds carry the full penalty.
| Contract Year | Surrender Charge |
|---|---|
| 1 | 9% |
| 2 | 8% |
| 3 | 7% |
| 4 | 0% |
Fees and Tradeoffs
There are no explicit annual contract fees or rider fees on LunarLock 3-Year. The economics are built into the rate spread — AuguStar earns a margin between what it earns on its portfolio and what it credits to you. That is standard for MYGAs and fixed annuities and is not a hidden charge, just the normal insurance wrapper cost.
The real tradeoffs are structural. The surrender charges start at 9% — higher than many three-year MYGA competitors — and the MVA creates a second potential exit cost beyond the stated schedule. Combined, those two factors mean this product rewards patient buyers who hold to maturity and penalizes those who don't. If you hold all three years, the math is clean. If you exit early, it can cost more than expected.
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 | 10% of premiums paid in Year 1; 10% of prior 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
LunarLock 3-Year is a clean three-year guaranteed-rate annuity from a carrier with solid financial backing. For a buyer who wants certainty, tax deferral, and a short commitment without any product complexity, it does what it promises. The nursing home waiver and full-account-value death benefit are genuine benefits that make the product more practical for buyers in retirement.
The limitation is the exit cost. A 9% first-year surrender charge plus MVA is steep for a three-year product, and shoppers who might need the money before maturity should compare exit-cost structures carefully across peers. If you know the money is committed for three years and you value the simplicity of a single locked rate, LunarLock is a reasonable choice. If you are not sure about your liquidity needs, a shorter surrender alternative or a higher free-withdrawal allowance might serve you better.