LunarLock MVA 7-Year review

It depends on your situation. For someone who has truly long-term money, wants a guaranteed rate, and is unlikely to need access beyond the 10% annual free withdrawal, this is a good product. The rate is real, the structure is clear, and the nursing home rider provides a meaningful out in a medical emergency. For someone who might need the money before year seven — or who is buying during a period of rising rates — the MVA introduces a layer of uncertainty that could make the effective surrender cost higher than the schedule suggests.

The main reason is certainty. You lock in a guaranteed rate for seven years and know exactly what your money will earn, regardless of what interest rates do. The 5.10% standard rate (5.30% at $100,000 and above) is meaningful relative to many fixed alternatives, and tax deferral adds to the effective yield for non-qualified money. A secondary reason is the nursing home rider — if health forces a major life change, the contract has a built-in way out that doesn't cost extra. The full-account-value death benefit is also cleaner than some MYGAs that pay a reduced surrender value at death.

I think this product is best for buyers between roughly 55 and 80 who are allocating a portion of their retirement savings to something predictable — not their emergency fund, not money they'll need soon, but a defined bucket where certainty matters more than liquidity. It works for both qualified accounts (IRA, rollover) and non-qualified taxable savings. It's less appropriate for someone who might realistically need early access, or for someone shopping primarily for income — there's no income rider and the structure isn't built around distributions.

You're buying a tax-deferred savings contract that guarantees your interest rate for the full seven-year term. There's no index, no buffer, no participation rate to track. The rate is fixed and guaranteed from day one. The insurance company takes the investment risk; your account simply grows at the stated rate. What makes this an insurance product rather than a bank CD is the tax deferral (for non-qualified money), the death benefit, the nursing home rider, and the regulatory protections that come with insurance contracts. The MVA clause is where that comparison breaks down: unlike a CD that has a known penalty for early redemption, a MYGA with MVA has a penalty that floats with interest-rate movements.

At issue, AuguStar sets a guaranteed interest rate that applies for the full seven-year contract period. The current declared rates are 5.10% annually for standard premiums and 5.30% for premiums of $100,000 or more — both guaranteed for all seven years, not just a promotional first year. The guaranteed minimum interest rate (GMIR) floors the contract at 0.25% annually, which is the contractual backstop in an extreme scenario, but in practice the declared rate is what matters.

Interest compounds annually and is credited to your account value. You can access up to 10% of your account value per year without any charges or MVA — 10% of premiums paid in the first contract year, and 10% of the prior anniversary account value in each subsequent year. That provision allows for modest income or RMD management without triggering penalties.

The nursing home rider is the most important secondary feature on this contract. If you're confined to a qualified nursing facility for at least 90 consecutive days after the first contract year, the rider allows you to surrender the contract or take withdrawals above the free amount without incurring surrender charges. There's no extra fee for this coverage — it's built into the contract. That's meaningful because the most likely scenario where you'd need early access to this money is precisely the kind of health event the rider addresses. It doesn't eliminate the MVA (that adjustment may still apply even with the rider, depending on contract terms), but it removes the surrender charge component of the penalty.

The surrender schedule runs nine years, stepping from 9% in year one down to 3% in year seven, then 0% in year eight. That's steeper in the early years than some seven-year MYGAs, so the commitment is real, particularly in the first three years.

More important for this product is the MVA — a Market Value Adjustment that applies to surrenders and excess withdrawals during the charge period. An MVA means the actual penalty you pay is not simply the schedule percentage. When interest rates are higher than when you bought the contract, the MVA increases your effective penalty. When rates are lower, it can reduce it. The practical implication: if you buy this during a period of moderate rates and rates rise over the next few years, a large surrender could cost more than the printed schedule alone suggests. Free withdrawals within the 10% annual amount are not subject to surrender charges or MVA, which provides a meaningful liquidity lane for routine needs.

There are no ongoing fees on this contract — no base contract fee, no rider charge, no spread taken against your credited rate. The rate you're quoted is what you earn. That's a genuine advantage of a MYGA structure versus FIAs with built-in index costs or VAs with subaccount expenses.

The real tradeoffs are structural. First, the MVA: it's the defining variable-cost element and the main reason this product requires more care than a simple fee-free framing might suggest. Second, the GMIR of 0.25% is very low — it's the contractual minimum if AuguStar ever renews at rock bottom, but current rates are far above it. Third, there's no income rider and no accumulation flexibility beyond the fixed rate — if you decide you want index-linked growth or guaranteed lifetime income midway through, you can't add it to this contract. Finally, the minimum premium of $10,000 is accessible, but the rate premium for $100,000 and above means smaller buyers are leaving 20 basis points on the table relative to larger depositors.

Legal Entity: AuguStar Life Insurance Company

Parent: Constellation Insurance

A.M. Best Rating: A