LunarLock Prime 5-Year review

Yes, with a caveat. For someone who genuinely wants to park money for five years and earn a guaranteed fixed rate, this is a reasonable product from a financially solid carrier. The caveat is the MVA: if you ever need to surrender early and rates have moved up, your actual penalty will exceed the printed charge. That's not unusual for MYGAs, but it means this product works best for buyers who are confident they won't need the money during the surrender period.

The core appeal is simplicity and certainty. You deposit a lump sum, lock a guaranteed rate for five years, and know exactly what the account value will be at the end of the term assuming no early withdrawals. Compared to a CD, MYGAs generally defer taxes on interest until withdrawal — a meaningful advantage for non-qualified money. The $10,000 minimum makes this accessible to a wider range of buyers than products with higher entry points, and the wide issue-age window (18–90) means it works across life stages.

I think this product fits a narrow but real segment: a conservative saver — often in their 50s through 70s — who has non-qualified or IRA money they want to grow at a guaranteed rate for five years and doesn't need an income rider or index-linked upside. It also works for RMD planning, since RMDs are accommodated without triggering surrender penalties. It's less suitable for someone who might need liquidity beyond the 10% free-withdrawal limit or who wants any chance at market-linked returns.

A MYGA is a contract between you and the insurance company. You hand over a lump sum; they guarantee it will earn a fixed interest rate for a specified period. Unlike a bank CD, the growth is generally tax-deferred until you take distributions, and there's no FDIC protection — the guarantee rests on the claims-paying ability of the issuing company, in this case AuguStar Life Insurance Company. AuguStar holds an A rating from A.M. Best, which is in the solid range for annuity issuers, though it is not the top tier held by some of the largest carriers. The nursing home rider and the death benefit are additional layers of value layered on top of the basic rate guarantee.

The LunarLock Prime 5-Year credits a single fixed interest rate — currently 4.85% for deposits under $100,000 or 5.05% for $100,000 or more — guaranteed for the full five-year surrender period. There are no allocation choices, no crediting method elections, and no renewal rate uncertainty during the term. The minimum guaranteed interest rate (GMIR) is 0.25% annually, which is the contractual floor if AuguStar ever had to reduce rates in an extreme scenario — though in practice the rate is locked at issue for the full initial term.

The two-tier structure is straightforward: crossing the $100,000 threshold gets you an extra 0.20 percentage points. This is a common MYGA feature, and it creates a modest incentive to consolidate assets if you're close to the breakpoint.

The nursing home rider is included at no additional charge. It allows you to surrender the contract without surrender charges — though the MVA may still apply depending on state and contract terms — if you're confined to a nursing home or similar care facility for a defined period. For a product in the 18–90 issue-age window, that's a meaningful provision. It provides a real safety valve for buyers who are older or have health concerns that make institutional care a realistic possibility during a 5-year commitment.

You're trading five years of liquidity for a locked guaranteed rate. Within that commitment, the free-withdrawal provision gives you 10% of premiums paid in Year 1 and 10% of the prior anniversary account value in Years 2 onward — enough to handle RMDs for most buyers and modest discretionary needs without triggering charges.

Amounts beyond the free-withdrawal limit are subject to the surrender schedule below, plus a market value adjustment (MVA). The MVA is an interest-rate-sensitive adjustment that can increase or decrease your effective surrender cost depending on where rates stand at the time of withdrawal. If rates have risen since your contract was issued, the MVA works against you. If rates have fallen, it may work in your favor. Buyers who are highly confident they'll hold to maturity can treat the MVA as background noise. Buyers with any doubt should take it seriously.

There are no base contract fees and no rider fees on this product. The MYGA structure means AuguStar earns its spread by investing your premium in bonds at a yield higher than what they credit to you — that spread is baked into the rate you're offered, not charged separately. That's how all MYGAs work.

The real tradeoffs are structural: the 9% first-year surrender charge is on the steeper end for a 5-year MYGA (some competitors run lower), the MVA adds unpredictability to early-exit costs, and there's no income rider if your needs change and guaranteed lifetime withdrawals become a priority. The GMIR of 0.25% is a theoretical backstop, not a selling point.

Legal Entity: AuguStar Life Insurance Company

Parent: Constellation Insurance

A.M. Best Rating: A