Why it earned this rating
Our assessment
Rate Lock Fee-Based 5-Year is the advisory-channel version of Guaranty Income Life's standard 5-year MYGA, and it earns a slightly better rating than its commission sibling because the credited rates run modestly higher — reflecting the absence of a commission load in the product economics. The MVA exposure and year-1 withdrawal restriction are unchanged, which keeps it in good-option rather than strong-option territory. For the RIA client base it is designed for, it is a well-matched accumulation vehicle.
The short version
This is a five-year guaranteed-rate annuity built for fee-only advisory relationships. When a client works with a registered investment advisor who charges separately for advice, the carrier does not need to embed a commission into the product's cost structure — and in theory, that difference flows back into the credited rate. The Rate Lock Fee-Based 5-Year is Guaranty Income Life's answer to that arrangement: the same clean MYGA design as the standard version, with rates that reflect the advisory channel's economics. The important constraints have not changed, though: the MVA can widen your effective exit cost if rates rise, and year 1 has no penalty-free withdrawal window.
Key facts
The full review
Is Guaranty Income Life Rate Lock Fee-Based 5-Year a Good Annuity?
Yes, for the right buyer. If you are working with a fee-only or RIA advisor and want a straightforward five-year locked rate with no embedded commission diluting the yield, this product is a reasonable choice. The rate tiers at $100,000 and $250,000 are worth knowing about, the RMD mechanics are clean, and there are no fees layered on top of your advisor's charge. The product is less attractive if you need access in year 1, are concerned about rising rates triggering the MVA, or are shopping for income or index participation.
Why Someone Would Buy This Annuity
The rational case starts with the channel match: if your advisor charges a fee for their services, you are already paying for advice separately, and an annuity that eliminates the embedded commission cost can deliver a higher guaranteed rate for the same level of carrier risk. Beyond that, the reasons are the same as any MYGA — certainty for five years, tax deferral, a guaranteed floor through the MGSV, and the nursing home and terminal illness waivers as a safety valve on the liquidity commitment. The rate improvement over the commission version is modest but real, particularly above the $100,000 threshold where both the medium and high bands clock in at 5.20%.
Who This Annuity Is Best For
I think this product is best for retirees and near-retirees in fee-only advisory relationships who want to park a portion of their IRA or non-qualified savings at a guaranteed rate for five years. It works particularly well for clients already taking RMDs from an IRA — the pass-through provision keeps distributions flowing without triggering surrender charges. It is less suited for clients whose advisory arrangement is commission-based (the regular Rate Lock 5-Year already handles that), for anyone who needs meaningful liquidity in year 1, or for clients who want any form of income guarantee or market-linked growth.
What You're Really Buying Here
You are buying a contract that locks your interest rate at issue for the full five-year term, with no allocation decisions to make and no market exposure to manage. The fee-based label does not mean this is a managed account — it means the product was designed for distribution through advisors who are compensated separately by their clients rather than through commissions embedded in the annuity. The economics matter to the rate you receive, but the underlying product structure is identical to the standard Rate Lock: one fixed rate, one guarantee period, and an MVA that adjusts your surrender value based on what interest rates have done since you bought. Rates that looked attractive at issue can look less so if the market has moved significantly, and the MVA captures that reality on the way out.
How the Core Feature Works
The Rate Lock Fee-Based 5-Year credits a single fixed interest rate, set at issue and guaranteed for the entire five-year term. The rate is tiered by deposit size: $10,000–$99,999 earns 5.10%, $100,000–$249,999 earns 5.20%, and $250,000 or more also earns 5.20%. The top two bands offer the same rate, which means buyers crossing the $100,000 threshold capture the full step-up. These are brochure-date figures — ask for the current rate sheet at application, because MYGA rates change with market conditions.
Interest credits compound tax-deferred inside the contract each year. At the end of the five-year period, the contract typically offers renewal terms or annuitization options. The mechanics are simple by design: there is nothing to monitor, no allocation to rebalance, and no crediting strategy to evaluate mid-term.
Why the Secondary Feature Matters
The terminal illness and nursing home confinement waiver is the secondary feature that carries real practical weight on a simple MYGA like this. If you are confined to a nursing home for at least 90 consecutive days or diagnosed with a terminal illness, you can access the full contract value without surrender charges. For a product asking you to commit five years of liquidity, that exit ramp addresses the most common "what if" scenario buyers worry about. The waiver is included at no cost. It does not eliminate all liquidity risk — a sudden non-medical cash need in year 1 still faces the full surrender charge plus MVA — but it softens the commitment meaningfully for clients who are concerned about long-term care scenarios.
Liquidity and Surrender Schedule
The surrender schedule runs 9%, 8%, 7%, 6%, 5% across years one through five. Year-1 is the most restrictive: there is no free-withdrawal provision in the first contract year. Starting in year 2, up to 5% of the prior anniversary accumulation value (minimum $250 per withdrawal) is available without charge. RMDs attributable to this contract are available starting in year 2 without surrender charges — an important provision for IRA holders who cannot defer distributions indefinitely.
An MVA — Market Value Adjustment — applies to amounts subject to surrender charges. The MVA adjusts the surrender value based on interest rate movements since contract issue. If rates have fallen, it may increase your surrender value; if rates have risen, it adds to your effective exit cost on top of the stated percentage charge. Buyers entering a rising-rate environment should treat the stated surrender schedule as a floor on potential exit costs, not a ceiling.
| Contract Year | Surrender Charge |
|---|---|
| 1 | 9% |
| 2 | 8% |
| 3 | 7% |
| 4 | 6% |
| 5 | 5% |
Fees and Tradeoffs
There is no base contract fee and no rider fee on this product. The advisor's compensation is paid separately by the client — that is the defining characteristic of the fee-based channel. The economic cost inside the contract is the carrier's spread, which is priced into the credited rate just as it is with any MYGA. The real tradeoffs are structural: the 9% year-1 surrender charge is steep relative to some competitors in the 5-year band, the year-1 free-withdrawal lockout is tighter than products offering 10% access from day one, and the MVA adds genuine uncertainty to the total exit cost in a rising-rate environment. None of these are disqualifying for the right buyer, but all of them matter when evaluating whether the rate premium over comparable alternatives justifies the commitment.
Product snapshot
| Feature | Details |
|---|---|
| Product Type | Fixed Annuity |
| Surrender Period | 5 years |
| Issue Ages | 0-100 |
| Minimum Premium | $10,000 |
| Crediting Methods | Fixed crediting rate |
| Free Withdrawal | 5% of prior anniversary accumulation value after year 1; Required Minimum Distributions available starting year 2 (minimum $250) |
| MGSV | 87.5% of premiums at 1-3% |
| Death Benefit | Greater of accumulation value or minimum guaranteed cash value at death |
| Income Rider | Not available |
| Premium Bonus | None |
| Availability | Not approved in AK, HI, ME, NY |
Carrier snapshot
Legal Entity: Guaranty Income Life Insurance Company
Parent: Kuvare US Holdings, Inc.
A.M. Best Rating: A-
Guaranty Income Life is a subsidiary of Kuvare US Holdings, a holding company focused on the life and annuity space. The A- rating from A.M. Best is adequate for a five-year fixed annuity commitment. Kuvare is not a household name, and buyers or advisors who prioritize brand recognition may prefer a larger carrier — but A- is a reasonable tier for a product of this duration, and the MGSV provides a contractual floor regardless of what happens to credited rates over the term.
Final take
Rate Lock Fee-Based 5-Year is a clean, no-frills MYGA that fits a specific context: an RIA or fee-only advisory client who wants a five-year guaranteed rate and whose advisor is already compensated separately. In that context, the product does what it is supposed to — delivers a slightly higher credited rate than the commission version without adding complexity or layered fees.
Outside that context, the product's advantages narrow. If your advisor is commission-compensated, the standard Rate Lock 5-Year is the appropriate version. If you need liquidity in year 1, neither version of this product works well. If the MVA risk in a rising-rate environment is a concern, a shorter-term MYGA or a product without an MVA may be a better fit. For the fee-based client with a five-year horizon and no income-generation priority, this is a solid option.