LiveWell 5-Year Variable Annuity review

It depends on what you want from it. As a low-cost, tax-deferred accumulation vehicle for someone who already understands market risk, it is a reasonable choice and cheaper than many variable annuities. It is a poor choice for anyone shopping for guaranteed income or principal protection, because this version offers neither — there is no living benefit rider and no floor under the subaccount value.

The rational reason to buy LiveWell 5-Year is tax-deferred growth without a contribution ceiling. Someone who has already filled up a 401(k) and an IRA, wants to keep investing in market-based funds, and would rather defer taxes on gains until withdrawal could use this as a non-qualified accumulation wrapper. The 5-year surrender is short enough that the money is not tied up for a decade, and the base cost is low enough that the tax-deferral math actually has a chance of paying off over a long horizon.

I think LiveWell 5-Year fits a younger or middle-aged investor — the issue ages run all the way to 85, but the product makes the most sense well before retirement — who has a long time horizon, an appetite for market risk, and non-qualified dollars they want to grow tax-deferred. It is most useful for someone who has exhausted other tax-advantaged space. It is a bad fit for a conservative retiree who needs principal protection, anyone who wants guaranteed lifetime income, or someone funding it with already-tax-deferred IRA money, since the annuity's tax deferral adds nothing inside an IRA.

Strip away the brochure language and this is a mutual-fund-style investment account inside an insurance contract. Your premium goes into subaccounts you choose, and those subaccounts rise and fall with the markets exactly like the funds they track. The insurance company is not protecting that value while you accumulate — there is no buffer, floor, or cap. What you actually get for the insurance wrapper is tax deferral on gains, a death benefit, and the option to convert to a stream of income later. The real question is whether those features are worth the layered fees compared with simply owning the funds in a taxable brokerage account.

The core of LiveWell 5-Year is the investment menu. Midland National offers more than 140 investment options spanning 25-plus money managers, so you build a portfolio inside the contract much like you would in a brokerage account. Your contract value is the sum of those subaccounts, and it moves with their performance — there is no crediting formula, cap, or participation rate softening the ride the way a fixed indexed annuity would. The investment option fees on those subaccounts run from roughly 0.52% to 2.29% net, and they are charged on top of the base contract fee. That stacking is the most important mechanic to understand: your all-in annual cost is the contract fee plus whatever the funds you pick charge.

The secondary feature worth attention is the death benefit, because it is the main insurance value here in the absence of an income rider. You choose among three structures. The Accumulation Value death benefit simply pays out whatever the contract is worth — the lowest cost at a 1.00% base fee. The Return of Premium death benefit pays the greater of contract value or premiums paid (adjusted for withdrawals), so heirs get back at least what went in, and the base fee rises to 1.25%. The Enhanced Death Benefit steps up to the highest contract-anniversary value during the step-up period through age 85, locking in market gains for legacy purposes, at a 1.55% base fee. Which one matters depends entirely on whether you are buying this for yourself or for the people you leave it to.

The surrender schedule runs 7%, 6%, 5%, 4%, 3%, then 0% — five years of declining charges, which is short for a variable annuity. You can take up to 10% of remaining premium less than five years old each year without a charge, or your required minimum distribution if that is larger, and RMDs are treated favorably here. There is no market value adjustment, which removes one layer of unpredictability that many surrender-period products carry. It is also worth knowing the contract is offered through an advisor channel and that a no-surrender (C-share) option exists with no surrender charges at all, for buyers who prioritize full liquidity over the lower ongoing cost of the surrender-charge version. A $10 quarterly maintenance fee applies to policies under $50,000.

The fee story has two layers. The base contract fee starts at 1.00% if you take the Accumulation Value death benefit, rises to 1.25% for Return of Premium, and 1.55% for the Enhanced Death Benefit. On top of that sit the investment option fees, which range from about 0.52% to 2.29% net depending on the funds you choose. So a low-cost build might run a little over 1.5% all-in, while a richer death benefit paired with expensive actively managed funds could push the total well above 3%. That is the trade to weigh: the tax deferral only pays off if your all-in cost stays low enough not to eat the benefit. Pick expensive funds and the rich death benefit, and you are paying a lot for tax deferral you could partly replicate more cheaply elsewhere.

Legal Entity: Midland National Life Insurance Company

Parent: Sammons Financial Group

A.M. Best Rating: A+ (Superior)