Why it earned this rating
Our assessment
LunarLock 5-Year is a clean, no-frills MYGA from a carrier with an A (A.M. Best) rating, a reasonable minimum, and a competitive dual-tier fixed rate as of the brochure date. The surrender schedule starts high at 9% and that first-year exposure keeps it short of a top-tier rating, but the overall structure — no MVA, clear free-withdrawal terms, RMD compatibility, and a full-account-value death benefit — is well-suited to what this type of product promises.
The short version
This is a five-year guaranteed-rate annuity for people who want CD-like certainty with the tax deferral and death benefit an annuity provides. AuguStar backs it with an A-rated insurer under Constellation Insurance, the minimum is accessible at $10,000, and the product keeps it simple: one fixed rate, no indices, no riders, no moving parts. The main question is whether the rate offered when you apply is worth a five-year commitment and a 9% first-year exit cost.
Key facts
The full review
Is AuguStar LunarLock 5-Year a Good Annuity?
Yes, with conditions. If you have a five-year time horizon, want a guaranteed rate, and are comfortable treating this money as illiquid beyond the 10% annual free withdrawal, LunarLock 5-Year is a solid MYGA. If you are uncertain about the timeline, need income access, or are expecting index-linked upside, this is not the right vehicle.
Why Someone Would Buy This Annuity
The rational reason to buy LunarLock 5-Year is straightforward: you have money you do not need for five years, you want a guaranteed rate better than most bank products can offer, and you want the earnings to grow tax-deferred rather than being taxed annually the way a CD would be. The 10% annual free withdrawal adds some flexibility for smaller pulls without triggering surrender charges.
Who This Annuity Is Best For
I think this product works best for someone in the pre-retirement window — roughly age 55 to 80 — who wants a fixed portion of their portfolio locked in at a guaranteed rate while they wait for Social Security or other income to begin. The wide issue-age range (18–90) makes it usable across a broad spectrum, but it is most intuitive as a conservative savings vehicle for someone not interested in market exposure. It works well in both qualified accounts (IRA, 401(k), 403(b), Roth IRA, SEP/SIMPLE, 457(b)) and non-qualified. It is not well-matched to someone who might need principal access inside the five years, and it is not for anyone whose priority is generating immediate income — there is no income rider available.
What You're Really Buying Here
You are buying a five-year interest-rate guarantee from an insurance company. The carrier takes your premium, credits a fixed rate annually, and promises to return your principal plus accumulated interest at maturity — or at death, whichever comes first. The insurance wrapper adds tax deferral and a guaranteed death benefit (full account value) that a bank CD does not offer. What you give up is liquidity: surrendering early triggers real charges, and unlike a CD, the surrender penalties are percentage-based rather than interest-forfeiture. The structure is simple and transparent, which is part of the appeal.
How the Core Feature Works
LunarLock 5-Year credits a guaranteed fixed rate for the entire five-year term. As of mid-April 2026, AuguStar was quoting 4.95% for standard premiums and 5.15% for premiums at a higher threshold — the brochure references a two-tier rate but does not specify the exact breakpoint. The rate is locked at contract issue and does not reset annually or float with interest rates, which is the defining feature of an MYGA versus a traditional fixed annuity with annually renewable rates. At maturity, the accumulated value either renews or can be moved without penalty.
Why the Secondary Feature Matters
The most useful secondary feature is the nursing home surrender-charge waiver. If the contract owner is confined to a qualified nursing facility, surrender charges can be waived, which meaningfully reduces the illiquidity risk for older buyers. This matters because the population most likely to buy a 5-year MYGA is also the population most likely to face a health event that requires accessing funds before maturity. The waiver does not eliminate surrender risk for other life events, but it addresses the most common concern about locking up retirement assets.
Liquidity and Surrender Schedule
Liquidity is the main tradeoff here. Year 1 carries a 9% surrender charge — that is high for a 5-year product relative to peers that often start at 7% or 8%. Charges step down by one percentage point each year, landing at 5% in Year 5. There is no MVA on this contract, which is a meaningful positive: your surrender cost is the flat percentage, not a percentage that can balloon further if interest rates have risen since you purchased.
The 10% free-withdrawal provision softens the picture. In Year 1, you can withdraw up to 10% of premiums paid without a charge. In Years 2 through 5, the free amount is 10% of the previous account anniversary value. That means ongoing access to roughly a tenth of your balance annually without penalty — useful for living expenses or RMDs. Required minimum distributions are specifically accommodated for qualified accounts, and the nursing home waiver provides additional relief in the right circumstances.
| Contract Year | Surrender Charge |
|---|---|
| 1 | 9% |
| 2 | 8% |
| 3 | 7% |
| 4 | 6% |
| 5 | 5% |
| 6 | 0% |
Fees and Tradeoffs
There are no explicit fees on this contract — no annual contract charge, no rider fee, no asset-based spread to erode the fixed rate. The economics are built into the rate itself: the carrier sets the credited rate at a level that covers its costs and profit margin, so the "fee" is the gap between what they earn on your premium and what they credit to you. That is standard for MYGAs and is not a criticism, but it is worth understanding when comparing quoted rates across carriers.
The real tradeoffs are structural: a five-year commitment, a 9% first-year exit cost, and zero upside participation if rates rise significantly after you lock in. The Minimum Guaranteed Surrender Value (MGSV) is 87.5% of premiums growing at 1–3%, which is the regulatory floor and not a particular distinguishing feature — it ensures you cannot lose principal in a way that drops below the statutory minimum.
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 | 10% of premiums paid in Year 1; 10% 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
LunarLock 5-Year is a workable MYGA for someone who has five-year money, wants a guaranteed rate in a tax-deferred wrapper, and does not need income features. The carrier's A rating from A.M. Best is respectable, the minimum is low enough to be accessible, and the no-MVA structure keeps surrender costs predictable. The 9% Year 1 charge is on the higher side for this duration, but if you intend to hold to maturity — which is the right way to use any MYGA — it is not a practical concern.
Where this product falls short is differentiation. There is no premium bonus, no income rider, no index participation to offer upside optionality. That simplicity is a feature for some buyers and a limitation for others. If you want a clean five-year guaranteed rate and nothing else, LunarLock 5-Year delivers exactly that. If you want any of those extras, you will need a different product.