NAC Guarantee Plus 3-Year review

It depends on what you need. For a buyer who wants a short, guaranteed-rate accumulation vehicle with a well-rated carrier and no complexity, yes — this is a good annuity. The rate is locked for the full term, the carrier is A+ rated by A.M. Best, and the structure is straightforward. For someone who wants access to principal in the first year, index-linked upside, or any kind of income feature, this is the wrong product.

The rational case is simplicity and certainty. A buyer who has found a competitive three-year rate, wants it locked for the full term, and does not expect to need the money for three years has a clear reason to use this contract. The wide issue age range — zero to ninety — means it fits IRA rollovers and trust-owned structures that some shorter-age-window MYGAs would exclude. The $20,000 minimum is accessible without being unusually low.

I think this annuity is best for a conservative saver, likely in the fifty-five to seventy-five range, who is rolling over a maturing CD or a prior annuity and wants a short commitment before a planned retirement spending event. It works in both qualified and non-qualified accounts. It is not built for someone who expects to draw income in the near term, wants downside-protected market participation, or has a meaningful chance of needing more than interest earned before the three-year term ends.

You are buying a three-year insurance contract that credits a fixed interest rate guaranteed from day one to the end of the surrender period. There is no allocation decision to make, no index to follow, and no rider to activate. The trade is simple: give up liquidity for three years, receive a guaranteed rate in return. The insurance wrapper provides tax deferral on growth, and the death benefit passes full account value to heirs without surrender charges. That is the full picture.

North American sets a fixed crediting rate at issue and guarantees it for the entire three-year contract term. The rate is tiered by premium band: a lower rate applies to the $20,000 minimum tier, and a higher rate applies at the upper band. The spec indicates 4.40% for the lower band and 4.80% for the higher band as of the brochure date — but MYGA rates change frequently, and current rates should be confirmed directly before purchasing. Interest compounds inside the contract and is not taxed until withdrawal.

The free-withdrawal provision matters most for IRA holders who need to satisfy required minimum distributions. After the first contract anniversary, penalty-free withdrawals equal to interest earned in the prior year are available, and systematic withdrawals can be structured monthly, quarterly, semi-annually, or annually with a $50 minimum. The Nursing Home Confinement Waiver adds a meaningful safety valve — if the owner is confined to a nursing home for a qualifying period, surrender charges can be waived, which helps address the liquidity concern that MYGAs otherwise carry.

You are trading three years of liquidity for a locked rate. In the first year, penalty-free access is limited to interest earned to date — not a percentage of contract value. After the first anniversary, you can withdraw interest earned in the prior contract year without charges. Amounts beyond that are subject to surrender charges of 9% in year one, 8% in year two, and 7% in year three.

A Market Value Adjustment — MVA — also applies to surrenders subject to charges. The MVA adjusts your surrender value based on changes in interest rates since issue: if rates have risen, the MVA reduces your proceeds; if rates have fallen, it increases them. This adds meaningful interest-rate risk to any early surrender and is something buyers should understand before committing. The MVA is not unique to this product, but it should not be overlooked.

There are no explicit base contract fees or rider fees on the core MYGA structure. The product is sold through commission channels, which means cost is embedded in the rate rather than charged as a separate fee — this is standard for MYGAs. The optional income rider has no fee or roll-up rate disclosed in the spec, and buyers interested in income should evaluate that separately.

The real costs are structural. The MVA means an unplanned early surrender could cost more than the stated surrender charge alone suggests. The first-year free-withdrawal limit means you should not rely on this contract for any near-term capital access. And the short three-year term means you will face a reinvestment decision sooner than with a five- or seven-year MYGA.

Legal Entity: North American Company for Life and Health Insurance

Parent: Sammons Financial Group

A.M. Best Rating: A+