The short version
In exchange, every crediting strategy on the contract caps, participates in, or spreads the index return rather than paying it in full, and the premium is committed for 10 years.
The contract offers 5 crediting accounts, but we don't have a cap we can quote here as a single, comparable annual S&P 500 point-to-point figure. That can mean several things: the menu may not include a plain point-to-point account at all, an account that names the S&P 500 may carry a fee, a spread, or a reduced participation rate that makes its cap not directly comparable, or a plain point-to-point account may exist and our rate data simply doesn't carry a cap figure for it. Each account's own terms, where we have them, are in the table below.
Account menu
Full account menu · 5 accounts
| Account | Crediting method | Rate terms | Premium | In force since |
|---|---|---|---|---|
| Option A: Annual Reset Monthly Average with Participation and Fee | Point to Point | Participation 20.00% · Fee 6.00% | $10K–$500K | 2024-03-04 |
| Option B: Fixed Interest Rate | Fixed Account | Declared rate 2.10% | $10K–$500K | 2024-03-04 |
| Option D: Annual Reset Monthly Point-to-Point with Cap | Point to Point | Cap 1.50% | $10K–$500K | 2024-03-04 |
| Option J: Annual Reset Annual Point to Point with Cap and Spread | Point to Point | Cap 4.00% · Fee 0.50% | $10K–$500K | 2024-03-04 |
| Option U: Annual Reset Low Volatility Daily Risk Control | Point to Point | Participation 75.00% | $10K–$500K | 2024-03-04 |
How this contract works
A fixed indexed annuity works by measuring an index's return over a set period and applying a crediting formula to decide how much of it you keep. A cap sets a ceiling on the credit; a participation rate credits a percentage of the index's gain; a spread subtracts a fixed amount before crediting the rest. None of it is direct market ownership, and none of these formulas can produce a negative credit — the worst a crediting period can do is pay zero. The guarantee behind all of it is a contractual obligation of National Western Life, backed by the company's own reserves, not by the FDIC and not by any bank.
The contract also carries a declared fixed account paying 2.10%, for premium you would rather not tie to an index at all. Money can typically be moved between the fixed account and the index strategies at each contract anniversary; check the carrier's disclosure for the exact transfer window.
Getting your money out
The contract allows 10% out each year without a surrender charge. Beyond that allowance, a withdrawal during the surrender period is reduced by the charge for that contract year — on top of whatever the index accounts did or didn't earn.
The surrender charge starts at 10% in year 1 and steps down to 2% in year 10; the full schedule is in the table below. Those percentages come off the amount you withdraw, which is why an early exit can return less than you put in even in a year the index accounts credited something.
Fees and tradeoffs
Of the 2 crediting accounts our rate data reports a strategy-fee figure for, 2 carry an explicit annual charge on top of what it credits — often the cost of a higher cap or an uncapped participation rate. Each account's own rate is in the table below rather than summarized here, because it varies account to account. Our rate data doesn't carry a fee figure at all for 3 other accounts on the menu — that is a gap in the data, not evidence those are free.
The Income Outlook carries a charge of 1.00% annually (limited to interest) (1.00% max), and it is optional — declining it removes both the benefit and the charge. That charge buys the rider's benefit; it does not raise the credit on any index account.
The real tradeoffs on a contract like this are the crediting caps and the surrender period, not a visible fee line. Gains come out as ordinary income rather than capital gains, and a withdrawal before age 59½ generally carries a 10% IRS penalty on top of the tax. Neither is a reason to avoid the product; both are reasons it suits money you have already decided not to touch.
Who this fits
The buyer this suits already wants downside protection more than upside, and is comfortable getting a share of an index's gain in exchange for never taking its losses for 10 years. Protection is the product being sold; full market participation is not.
It is the wrong contract for anyone who might need the principal early, for a buyer who wants uncapped market exposure, and for money that is already an emergency reserve. Under age 59½, the 10% IRS penalty on early withdrawals is an additional reason to look at this as long-term money.
The carrier
Every guarantee in this contract is only as good as National Western Life, which currently holds an A.M. Best financial strength rating of A. An annuity is not FDIC insured; the backstop is the carrier's own balance sheet, with state guaranty association coverage behind it at limits that vary by state.
The contract is filed in 49 states, not including New York — New York files its own annuity products, so a New York resident is shopping a different and much smaller shelf.
- Death Benefit
- Full Account Value payable as a single sum, or Contract Value payable under an elected Settlement Option, if the Annuitant dies before the Annuity Date. If the Annuitant dies on or after the Annuity Date, the Beneficiary receives only any unpaid guaranteed amounts under the Settlement Option in force. Spousal Continuation Benefit available if the surviving spouse is the named Beneficiary.
- Minimum Guaranteed Surrender Value
- 87.5% of premiums received, less withdrawals, accumulated at the Minimum Guaranteed Interest Rate (never less than 1.00%, never more than 3.00%, reset quarterly for new policies and guaranteed for the Contract Term)
- RMD Treatment
- RMD-friendly: surrender charges waived on IRS required minimum distributions.
- Withdrawal Provisions
- Systematic withdrawal of interest (each payment at least $100) is available in lieu of the 10% free-withdrawal option; only one liquidity method may be elected per Policy Year. IRA-qualified RMDs are free of Withdrawal Charge in all Policy Years. Separately (not stacking with free withdrawals, these are Withdrawal Charge waivers, not additional withdrawal capacity): (1) Terminal Illness or Injury Benefit — Withdrawal Charges waived on full surrender or partial withdrawal if the Annuitant is first diagnosed after the Policy Date with a terminal illness/injury with a life expectancy of 12 months or less; (2) Waiver of Withdrawal Charge after Qualifying Medical Stay — up to 75% of Account Value penalty-free after a 90+ consecutive-day hospital/nursing-facility stay requiring intermediate care, Annuitant must be age 75 or younger on the Policy Date. Both are baseline contract features, not fee-bearing riders (no chronic-illness income-acceleration rider is offered).