Multi-Choice Annuity 3 (Interest-Only Withdrawals) review

Yes, for a specific kind of buyer. It's a good annuity for someone who has already earmarked money for a 3-year hold and wants a clean, single-rate contract without rider fees or index-crediting complexity. It's a weaker fit for someone who wants any meaningful access to principal during the term — the interest-only provision is stricter than what most MYGA shoppers are used to, and it's worth confirming you actually understand that limit before you buy.

Someone buys this version specifically because they want scheduled access to credited interest — for supplemental income, or just as a safety valve — and are willing to accept a slightly lower rate than the fully-locked base version to get it. It also appeals to buyers who value simplicity: one fixed rate, one 3-year term, no index math, no rider fees, and a full-account-value death benefit that passes to beneficiaries without a surrender charge. For short-horizon, principal-protection-first money — bridge funds before a known expense, or a conservative sleeve inside a larger portfolio — that combination is straightforward to evaluate.

This product is best suited to buyers who are at least several years from needing this specific pool of money, who prioritize a locked, guaranteed rate over any chance at higher (but uncertain) index-linked returns, and who are comfortable in either qualified or non-qualified accounts — the RMD carve-out makes it workable inside an IRA. It's not a fit for someone building an emergency-fund-adjacent position, since the interest-only free-withdrawal design means you can't pull principal without triggering a surrender charge and, outside California, a market value adjustment.

Strip away the product name and this is a three-year certificate-style contract: you deposit at least $15,000, the insurer credits a single fixed rate for the full term, and at the end of three years you can walk away, renew into a new rate, or roll the money elsewhere — all within a 30-day penalty-free window. The "Interest-Only Withdrawals" label in the product name is the whole story of what makes this variant different from its siblings: it defines exactly how much of your money you can touch early without a penalty, and the answer here is "only what the contract has already earned you," not a percentage of your original deposit.

The crediting design is as simple as MYGAs get: one fixed rate, guaranteed for the full 3-year term, with no indexed, structured, or variable strategies to choose between. As of the brochure date, that rate is 4.30% for premiums under $100,000 and 4.60% for premiums of $100,000 or more — a meaningful gap that rewards larger deposits. The rate resets at the start of each new 3-year term based on market conditions at that time, and The Standard gives contract owners a 30-day window at each renewal to either accept the new rate or surrender without penalty, which is a genuinely useful safety valve for a rate-sensitive product like this.

The free-withdrawal provision is the feature that actually differentiates this contract, and it's more restrictive than what most MYGA buyers default to expecting when they hear "free withdrawal." Rather than the common structure of pulling out up to 10% of account value each year penalty-free, this variant limits penalty-free withdrawals to interest that has already been credited — nothing from the original premium. Even so, that's more liquidity than the base Multi-Choice Annuity 3 offers, which has no standing free-withdrawal allowance at all — and that extra liquidity costs rate. The base version pays 4.35% under $100,000 and 4.65% at $100,000 and above; this variant pays 4.30% and 4.60% — about 5 basis points less across both bands, since the insurer is giving you scheduled access to interest instead of holding everything fully locked. (A separate sibling variant with a 10%-annual-withdrawal provision, with or without a Guarantee of Principal rider, also exists; we don't have current rate data on that one to compare.) This is a defensible trade for someone who wants some access to interest along the way, but it's the single most important thing to understand before choosing this variant over the fully-locked base.

You're trading three years of limited liquidity for a locked rate, and the limits here are tighter than typical. The surrender charge schedule runs 9.4% in year one, 8.5% in year two, and 7.5% in year three (lower in California — 8%, 7%, and 6% — where MVA also doesn't apply). A market value adjustment applies to surrenders and withdrawals above the free amount everywhere except California, meaning your penalty can move up or down with prevailing interest rates at the time you withdraw. Outside the interest-only allowance, RMDs, and the terminal-illness and nursing-home waivers (both available after the first contract year), there's no standing way to access principal early without cost. If there's a realistic chance you'll need more than accumulated interest before the term ends, this variant isn't the right choice — the standard 10%-withdrawal version of this same annuity would be a better fit.

There's no explicit product fee, M&E charge, administrative fee, or annual contract fee disclosed in the available materials — a real advantage of the simple fixed-rate design. No separate fee is broken out for the death benefit either, which pays the full account value to beneficiaries without a surrender charge. The real cost of this contract isn't a line-item fee; it's rate. You're paying for the interest-only withdrawal feature with a rate that runs about 5 basis points below what the fully-locked base Multi-Choice Annuity 3 pays for offering no standing free-withdrawal allowance at all. Whether that's worth it depends on whether scheduled access to credited interest is something you actually expect to use.

Legal Entity: Standard Insurance Company

Parent: StanCorp Financial Group, Inc.

A.M. Best Rating: A