SecureDesigns C-Share review

It depends. It is a reasonable annuity for a specific buyer: someone who wants tax-deferred market exposure inside a broad subaccount lineup, does not want a surrender period hanging over the account, and is comfortable paying for that flexibility year after year. It is not a good annuity for someone whose main goal is guaranteed lifetime income, because no living benefit rider is available on this share class. It is also a poor fit for cost-sensitive buyers who would do better in a low-cost I-share or a taxable brokerage account if the tax-deferral benefit is not material to their situation.

The rational reason to buy a C-share variable annuity is liquidity without commitment. You get the tax deferral, the subaccount menu, and the death benefit without locking yourself into a 5-, 7-, or 10-year withdrawal schedule. For an investor who expects to rebalance aggressively, who may want to 1035-exchange into a different product later, or who simply does not want their money trapped behind a surrender table, that flexibility has real value. The cost is transparent: you trade some of the long-term return for the right to exit any time.

I think SecureDesigns C-Share is best for a mid-career or pre-retiree investor working with a fee-based or commission advisor who wants tax-deferred growth inside a flexible wrapper. It tends to make the most sense for non-qualified money — situations where ordinary income tax treatment on withdrawals is the explicit tradeoff for years of compounding without 1099 drag. It is less appropriate for a buyer whose primary need is contractual income, for someone with a short time horizon (the high fee load eats into short-period returns), or for anyone who could achieve the same exposure inside a taxable account at a fraction of the cost.

You are not buying market participation directly. You are buying an insurance contract that holds a portfolio of variable subaccounts and wraps them in tax deferral and a death-benefit guarantee. The subaccounts are similar to mutual funds, and they carry their own internal net expense ratios (the brochure cites a range from 0.61% to 2.44%). On top of that, you pay an annual insurance charge to the carrier — and on a C-share, that insurance charge is higher than on the other share classes, which is the cost of giving up the surrender schedule. The "annuity" part of this contract is the tax wrapper and the death benefit, not the investment returns themselves.

The core of SecureDesigns C-Share is the subaccount menu. Security Benefit offers 85 variable subaccounts across all major asset classes — stocks, bonds, real estate, commodities, asset allocation, and alternatives. You allocate premium across these subaccounts, the account value moves with the underlying performance, and you can rebalance among them. The contract allows 14 free transfers per year with a $500 minimum and no transfer fee, which is reasonable for an actively managed sleeve.

The C-share distinction is what makes this version different from its siblings. There is no surrender period and no withdrawal charge schedule at any contract year. In exchange, you pay a 0.70% annual C-share rider charge on top of the base M&E. The product also offers two alternate rider configurations — a 4-year withdrawal-charge rider at 0.60% and a 0-year withdrawal-charge rider at 0.70% — which suggests the contract can be configured several ways at issue.

The secondary feature worth understanding is the optional Annual Stepped-Up Death Benefit, which costs 0.20% of contract value per year. The standard death benefit is already a return-of-premium guarantee for owners issued under age 81 — meaning beneficiaries get the greater of premiums paid (adjusted for withdrawals) or account value. The stepped-up option adds a high-water-mark feature: beneficiaries also get the highest contract anniversary value reached before the oldest owner's 81st birthday, plus subsequent premiums and less withdrawals.

In a long bull-market period, that ratchet feature can lock in gains you would otherwise have given back. It does not turn the contract into an income product, but it does make the death benefit more meaningful as a legacy-planning tool. Whether the 0.20% annual cost is worth it depends on how volatile the underlying allocation is and how much weight you place on death-benefit guarantees.

The defining feature here is that there is no surrender schedule. You can withdraw or surrender the contract at any time without an insurance-side withdrawal charge. Free withdrawals are described as 10% of cumulative purchase payments in the first contract year and 10% of contract value thereafter, but that distinction matters less here than on a B-share product because nothing above that 10% triggers a surrender penalty either — there isn't one. Systematic withdrawals are available immediately with a $100 minimum.

Withdrawals are still subject to ordinary income tax on gains and, if taken before age 59½, generally a 10% federal tax penalty on the taxable portion. So the structural liquidity is real, but the tax treatment still behaves like any other annuity contract. The chronic-illness waiver of withdrawal charges is largely moot on this share class given there are no charges to waive — it costs 0.05% of contract value and reads more like a vestigial feature carried over from the B-share design.

The fee stack is the central tradeoff of this product and deserves a careful look. The base mortality and expense risk charge is tiered: 0.85% on contracts under $25,000, 0.70% on contracts of $25,000 to $99,999, and 0.60% on contracts of $100,000 or more. On top of that is a 0.15% administration fee, a $30 annual policy fee (waived above $50,000), and the 0.70% C-share rider charge. So at the $100,000-plus tier, you are looking at roughly 1.45% in insurance charges before any optional rider — and roughly 1.70% on a smaller contract.

Add the underlying subaccount expense ratios (0.61% to 2.44% per the brochure) and the all-in annual cost can easily run 2.0% to 3.5% per year depending on subaccount choice. The 0.55% Extra Credit rider — only available for the first 7 years and applicable to the 4% bonus configuration — and the 0.20% stepped-up death benefit rider can stack further. This is a fully-loaded variable annuity, and the fee level is the main reason any C-share VA needs to clear a high bar relative to alternatives like a taxable index portfolio or a lower-cost fee-based annuity. Confidence on RMD treatment is low in the spec — if you are buying this for an IRA, ask Security Benefit for the current RMD handling directly.