Select Choice 5-Year review

It depends on the buyer. For someone who genuinely does not need access to the money for five years and wants a simple locked rate, this is a reasonable option. The declared rate is competitive, the carrier holds an A- rating from AM Best, and the product structure is transparent. For someone who wants any mid-period flexibility built in without paying extra for it, there are 5-year MYGAs from competing carriers that include 10% free withdrawals as a standard feature. This product works best when you treat it the way you would treat a 5-year CD — something you do not open until it matures.

The straightforward reason is a guaranteed rate for five years with better tax treatment than a taxable CD. Interest compounds tax-deferred, so a buyer in a meaningful tax bracket gets a genuine after-tax yield advantage compared with a bank CD paying the same stated rate. The death benefit treatment — full accumulation value paid to beneficiaries with no surrender charge or MVA, bypassing probate — also adds value for buyers who want a clean wealth-transfer mechanism alongside the growth component. The $2,000 minimum makes it accessible to savers who want to start with a smaller allocation.

I think Select Choice 5-Year is best for someone in the capital-preservation phase who has a clear 5-year time horizon on a portion of their savings, wants the tax-deferral benefit, and either does not expect to need mid-period withdrawals or is willing to pay the 0.10% rate reduction for the optional waiver rider. It fits non-qualified accounts particularly well — the tax deferral adds the most value when interest would otherwise be taxed annually. It is less suitable for someone who needs regular liquidity access, is shopping for income in retirement, or wants to participate in market upside.

You are buying a single-premium insurance contract that credits a declared fixed interest rate to your accumulation value for five years. The carrier sets that rate upfront and guarantees it for the entire initial guarantee period — it cannot be reduced during that window. At the end of five years you have a 30-day window to surrender penalty-free or let the contract roll into a new guarantee period under then-current rates. That renewal process repeats with progressively lower surrender charges (5%, 4%, 3%, 2%, 1%) on subsequent 5-year periods until charges reach zero. This is not an investment — it is a contractual interest rate guarantee backed by the carrier's general account.

Select Choice 5-Year uses a three-tier rate band structure. As of the September 2025 rate sheet, contracts below $50,000 and contracts from $50,000 to $99,999 each earn 4.70% annually, while contracts of $100,000 or more earn 4.95%. The guaranteed lifetime minimum rate is 1%, which is the floor the carrier commits to for any future renewal period — current rates at renewal will reflect then-current market conditions, but they cannot fall below that floor. The rate is guaranteed for the full initial five-year period regardless of what happens to interest rates in the broader market. That is the core value proposition: certainty for five years, then a decision point.

The most relevant secondary feature is the optional Waiver of Withdrawal Charge and MVA (PFW) Rider, which does two things. First, it allows annual penalty-free withdrawals of up to 10% of accumulation value after the first contract year — bringing this product more in line with what most competing MYGAs include as a standard feature. Second, it waives all charges and the MVA for full surrenders triggered by terminal illness, hospital confinement, or nursing home confinement after year one. The cost is a 0.10% reduction in your declared rate (or 0.20% if you also elect the Return of Premium Rider). Whether that trade makes sense depends on whether you want the optionality or are confident you will not need it — but for most buyers who might realistically need mid-period access, paying 0.10% to have the waiver available is a reasonable hedge.

This product is a 5-year commitment, and you should treat it that way. The base contract has no free-withdrawal provision, which means any distribution before the guarantee period ends — outside the optional rider — is subject to both the surrender charge and the MVA.

The MVA (Market Value Adjustment) means your effective exit cost is not fixed. If interest rates have risen since you bought the contract, the MVA will increase the amount withheld on surrender. If rates have fallen, it may reduce the charge. This is a meaningful risk in a rising-rate environment and one reason the base product scores lower on liquidity than a comparable MYGA offering standard free withdrawals.

The 30-day penalty-free window at the end of each guarantee period is the designed exit point — that is when you can surrender without charge or MVA. If you miss that window and roll into a new guarantee period, you are subject to the new period's schedule.

There are no explicit annual fees on the base contract. The "cost" is the spread between the declared rate and what the carrier earns on its general account — that is how fixed annuities work, and it is not a disclosed number. The optional riders carry explicit costs in the form of rate reductions: 0.15% for the Return of Premium Rider, 0.10% for the PFW Waiver Rider, or 0.20% if you elect both.

At the $100,000-plus rate of 4.95%, electing both optional riders brings your effective declared rate down to 4.75% — still competitive for a 5-year MYGA as of the rate sheet date, but worth understanding before you commit. The absence of any base-contract free withdrawal is the most meaningful structural tradeoff, and the MVA adds a risk factor that a simple CD does not carry.

Legal Entity: S.USA Life Insurance Company, Inc.

Parent: Prosperity Life Group

AM Best Rating: A-