Destination All American Gold 2.0 L-Share review

Depends on what you want it to do. It is a good annuity for someone who specifically wants market participation inside a tax-deferred wrapper, values a short 4-year surrender window, and is comfortable choosing among more than a hundred subaccounts. It is a poor fit for someone who wants principal protection, low cost, or guaranteed crediting, because none of those are what a variable annuity provides.

The main reason to buy this contract is tax-deferred growth with genuine equity exposure and a relatively short surrender commitment. Someone who has already maxed out other tax-advantaged accounts and wants more tax-deferred room, while keeping a broad set of investment options, is the natural buyer. The L-Share structure also appeals to buyers who don't want to lock money up for the seven, eight, or ten years that many variable annuities require. And the optional living benefit lets you convert that growth into protected lifetime income later if your plans change.

I think this annuity is best for a buyer in the accumulation phase who already understands market risk, wants tax deferral beyond what their 401(k) or IRA allows, and values the shorter 4-year surrender schedule over the lower cost of a longer-surrender contract. It works in both qualified and non-qualified money, though the tax deferral is most meaningful for non-qualified dollars. It is not a good fit for conservative buyers who can't tolerate seeing their account value drop, for anyone primarily shopping for guaranteed income (an indexed or income annuity will usually deliver that more cheaply), or for cost-sensitive buyers, since the fee stack is real.

You are buying direct market exposure wrapped in an insurance contract, not a guarantee. Your money goes into your choice of subaccounts that behave like mutual funds, so your account value rises and falls with the markets you pick. The insurance company is not promising you a return. What you are paying for is the tax deferral, the optional guarantees you can attach, and the death-benefit floor. The "L-Share" label simply describes the pricing class: a shorter surrender schedule in exchange for a 0.50% rider charge that runs for the first four years. Strip away the brand name and this is a flexible-premium VA where the structure, not the crediting, is the product.

The core of the contract is the subaccount platform. You allocate your premium across up to 118 variable investment options spanning stock, bond, and asset-allocation strategies, plus a one-year fixed account currently crediting 1.60% and dollar-cost-averaging options (a 6-month DCA at 6.00% and a 12-month at 3.00%, which are short-term promotional rates on money waiting to be moved into subaccounts, not a long-term return). Net subaccount expenses range from 0.40% to 2.37% depending on which funds you choose, and those fund costs come on top of the contract's own charges. Because returns track the underlying investments, there is no cap, participation rate, or floor here the way there would be in an indexed annuity. Your upside is uncapped, and so is your downside above the death-benefit floor.

The most meaningful optional feature is the Nationwide Lifetime Income Rider Plus, which adds a guaranteed lifetime withdrawal benefit. Before you turn income on, the benefit base grows at an 8.00% simple-interest roll-up for up to 10 years, and that base, not your actual account value, determines your guaranteed withdrawal amount for life. The rider costs 1.45% a year for single life or 1.60% for joint life, charged on the benefit base rather than the account value, and the contract allows those charges to rise to a maximum of 1.50% and 1.90% respectively. This matters because it lets an accumulation-focused VA double as an income vehicle, but the 8% figure is a simple roll-up on a notional base, not a real rate of return on your money. Whether the rider is worth it depends entirely on whether you actually activate income; if you don't, you've paid for a guarantee you never used.

The 4-year surrender schedule is the shortest part of this contract's commitment and its main selling point against longer VAs. You can withdraw 10% of total purchase payments each year with no surrender charge, and that 10% is available immediately rather than after year one. Above that amount, the contingent deferred sales charge applies on a 7%, 7%, 6%, 5% schedule before dropping to zero in year five. There is no market value adjustment, which removes one common variable from the surrender math. The contract also waives surrender charges for nursing home confinement and terminal illness (the nursing home waiver is not available in California), and required minimum distributions are exempt from the CDSC. One structural note worth understanding: as an L-Share, additional premium payments are only accepted in the first contract year. If you expect to keep adding money over time, that restriction matters.

The base contract runs 1.65% a year, made up of a 0.95% mortality and expense charge, a 0.20% administrative charge, and the 0.50% L-Share rider charge that applies only for the first four years. On top of that sit your subaccount fund expenses, anywhere from 0.40% to 2.37%, so a realistic all-in cost before any optional riders can land north of 2%. Add the living benefit rider and you are paying another 1.45% to 1.60% on the benefit base; add an enhanced death benefit and that's another 0.20% to 0.65%. There is also a flat $30 annual contract fee, waived once your contract value reaches $50,000. Larger deposits earn purchase-payment credits (0.50% on cumulative household premiums of $500,000 to $999,999, 1.00% at $1 million and up), which helps high-net-worth buyers but does nothing for the typical account. The honest trade here is straightforward: you are paying variable-annuity-level fees on money that is exposed to market risk, and every guarantee you want costs extra.

Legal Entity: Nationwide Life Insurance Company

Parent: Nationwide Mutual Insurance Company

AM Best Rating: A+