Liberty Choice review

It depends on what you're comparing it to. Against a true 5-year MYGA, I don't think Liberty Choice is the stronger choice — a MYGA locks its rate for the full surrender term, while Liberty Choice only guarantees the current rate for one year and can reset it every year after that, all while you're still on the hook for the same 8%-to-4% surrender schedule. Against a savings account or short CD ladder, it looks more competitive: the current 5.25% rate is attractive, there's no base contract fee, and the built-in Health Waiver Benefit adds a layer of protection most fixed annuities don't include standard.

The main draw is the current headline rate combined with a low, $5,000 minimum premium and a relatively short 5-year commitment compared to some fixed annuities on the market. A secondary reason is the built-in Health Waiver Benefit — nursing home, terminal illness, and disability surrender-charge waivers are bundled into the base contract at no extra rider fee, which matters to buyers worried about needing access to funds for care costs before the surrender period ends. A.M. Best's A- rating on the carrier also puts it in a reasonable financial-strength tier, not top of market but solidly investment-grade.

I think this fits a conservative buyer who wants a short-duration, principal-protected fixed annuity, values the health-related surrender waivers more than rate certainty, and is comfortable with a rate that can move after the first year. It's a reasonable fit inside an IRA or as non-qualified savings for someone who wants better-than-bank-account yield without market exposure. It's a weaker fit for someone who wants the rate they see on day one locked in for the entire surrender period — that buyer should be comparing this against actual MYGAs, not against itself.

Strip away the "5.25% rate" headline and what you're actually buying is a single-premium fixed annuity with a one-year rate guarantee wrapped inside a five-year surrender contract. The 5.25% figure is the sum of a 4.25% base declared rate plus a 1.00% first-year interest rate bonus — and the carrier is explicit that this is an interest rate bonus, not a premium bonus, meaning it never gets added to your account value as a lump sum. It simply boosts what you earn in year one. Starting in year two, the credited rate drops by that same 1.00%, and from there the carrier can reset the rate annually, subject only to the contract's guaranteed minimum. You're locked into the surrender schedule regardless of where that annual reset lands.

Liberty Choice offers a single crediting strategy: a declared fixed rate, reviewed and reset annually. There are no indexed, structured, or variable accounts to choose from — this is about as simple as annuity crediting gets. The current rate as of the carrier's most recent quick-reference rate sheet (effective 2/9/2026) is 5.25%, composed of a 4.25% base rate plus the 1.00% first-year bonus. After the bonus year, the rate falls to the base level and is then subject to the carrier's annual renewal-rate process going forward, which means future credited rates are not disclosed or guaranteed beyond the contract's stated minimum floor.

The Health Waiver Benefit is what separates Liberty Choice from a plain declared-rate fixed annuity. It waives surrender charges for withdrawals tied to nursing home confinement, terminal illness diagnosis, or disability — up to 10% of accumulated value in the first year and up to 50% of accumulated value thereafter, per the carrier's rate sheet. Because this is built into the base contract rather than sold as a separate rider with its own fee, it's a meaningful piece of value for a buyer worried about needing liquidity for a care event during the surrender window, even if they never need to use it.

The 5-year surrender schedule runs 8%, 7%, 6%, 5%, 4%, which is a fairly standard slope for this duration band, and a market value adjustment (MVA) applies on top of it — so withdrawals above the free amount during a period of rising interest rates could cost more than the stated surrender percentage alone. On the access side, the contract is generous: interest-only withdrawals are penalty-free in every contract year (not just after year one, which some competitors require), RMDs are penalty-free after the first policy year, and monthly interest withdrawals over $100 are also allowed without penalty. That combination gives a buyer real income flexibility even while principal remains locked behind the surrender schedule.

There's no disclosed base contract fee — no M&E charge, product fee, or annual administration charge in the available materials — and no rider fee, since the Health Waiver Benefit is built in rather than sold separately. That's a clean cost structure. The real tradeoff isn't a fee, it's the crediting design: you're accepting five years of surrender exposure in return for one year of rate certainty. The guaranteed minimum is also inconsistently disclosed across the two source documents — the product profile cites a 1.00% guaranteed annual return on premiums, while the carrier's separate rate sheet states a 2.40% minimum guaranteed renewal rate for policies issued in 2026, and the standard 87.5%-of-premium accumulation factor used industry-wide isn't spelled out in either document. If you're shopping this seriously, ask the carrier directly which minimum guarantee actually applies to your issue date.

Legal Entity: Liberty Bankers Life Insurance Company

Parent: Liberty Bankers Insurance Group

A.M. Best Rating: A-