Defender Annuity review

Yes, for the right buyer. This is a good annuity for someone who wants more index upside than a fixed indexed annuity can deliver and accepts a defined slice of market loss as the price of that upside. It is not a good fit for someone who wants their principal fully protected, who needs guaranteed lifetime income, or who might panic at seeing an account value drop in a bad index year.

The rational reason to buy Defender is to capture more of an index's growth than a fully protected product allows, while still putting a floor under part of your downside. A fixed indexed annuity protects all of your principal but caps your upside fairly tightly; a RILA like this one trades some of that protection for a higher ceiling. The 10% or 20% buffer lets you decide how much risk you are taking, and the multi-year strategies can be uncapped, which is the closest this category gets to open-ended growth.

I think Defender is best for a buyer roughly in their 50s to early 70s who has long-term money, already understands that a buffer is not the same as full protection, and wants index exposure inside a tax-deferred wrapper. It works for both qualified (IRA) and non-qualified money. It is less appealing for a conservative buyer who would lose sleep over any account-value decline, for someone who needs the money inside six years, or for someone shopping primarily for lifetime income, since Defender offers no income rider.

You are not buying the stock market, and you are not buying full principal protection. You are buying a six-year insurance contract that credits interest tied to an index over a chosen term, with a buffer that absorbs the first portion of a loss. If you pick a 10% buffer and the index falls 8%, you lose nothing. If it falls 15%, the buffer eats the first 10% and you absorb the remaining 5%. With a 20% buffer the protection is wider but the cap on your gains is typically lower. The real product is that tradeoff: you choose how much downside you are willing to own, and in return you get a higher upside ceiling than a protected annuity would give you.

Defender offers twelve structured strategies across five indices: the S&P 500, Russell 2000, MSCI EAFE, Nasdaq-100, and S&P MidCap 400. You allocate to one or more strategies, each defined by an index, a term (Annual Point-to-Point at one year, or Term End Point at three or six years), and a buffer level of 10% or 20%. At the end of the term, the contract measures the index change. Gains are credited up to a cap (for example, the brochure cites an 18% cap on the S&P 500 one-year 10%-buffer strategy and 12% on the 20%-buffer version), while several multi-year strategies are uncapped. The buffer applies only to losses; the participation rate, which is 100% on most strategies and 85%–105% on select multi-year options, does not apply to negative index returns. You can hold up to ten structured strategies at once, and there is also a fixed account, credited at 4.00% as of January 1, 2026. Cap rates are set by Nationwide and reset for new terms, so the specific caps above are a snapshot, not a guarantee — ask for the current rate sheet before buying.

The most useful secondary feature is the Performance Lock. It lets you lock in a strategy's current interim value at any point during the term rather than waiting for the term to end, which can be valuable if an index has run up and you want to secure the gain before it gives back. Locking in carries a 0.10% fee per remaining year in the term, so locking early in a six-year strategy costs more than locking late. It is a genuine hedging tool, but it is an active decision — you have to watch the strategy and choose to pull the trigger, and the fee means it is not free.

This is a six-year commitment, not a parking spot for money you might need soon. You can withdraw up to 10% of contract value each year starting in year one, which is more generous than the typical FIA that makes you wait until year two, and you must leave at least $5,000 in the contract. Withdrawals above the free amount during the first six years trigger a surrender charge running 8%, 8%, 7%, 6%, 5%, 4%, then 0%, plus a market value adjustment — an MVA is an interest-rate-driven swing that can raise or lower your surrender value depending on where rates have moved. There is also a subtler liquidity wrinkle: pulling money out of a structured strategy before its term ends invokes a daily interim value calculation that can be negative, so an early withdrawal can be worth less than your raw contributions even within the free amount. Required minimum distributions are honored if they exceed the 10% free amount, and Nationwide includes nursing home and terminal illness waivers at no extra charge that waive the surrender charge and MVA when the owner and annuitant are the same person and age 80 or younger at issue.

The headline here is that the base contract has a 0% product fee for contracts issued on or after June 1, 2025 — older contracts carried a 1.10% annual charge, so this is a meaningful improvement for new buyers. The only optional explicit cost is the Return of Premium Death Benefit, which runs 0.15% annually and guarantees your beneficiaries the greater of account value or premiums paid less withdrawals. The Performance Lock, if you use it, costs 0.10% per remaining year in the term. The larger tradeoff is not a fee at all — it is the buffer itself. Beyond the 10% or 20% cushion, losses are yours, and the cap limits how much of a strong index year you keep. That is the real price of admission for a RILA, and it is worth being honest with yourself about whether you can stomach it.

Legal Entity: Nationwide Life Insurance Company

Parent: Nationwide Financial

AM Best Rating: A+