Transamerica Advisory Annuity review

Yes, for a specific type of buyer. This is a good annuity for someone in the fee-based advisory channel who wants low-cost, tax-deferred access to institutional investment options without a surrender lock-up. It is less appealing for anyone who needs guaranteed lifetime income, principal protection, or a rider-based benefit — because none of those features exist here.

The main reason to buy Transamerica Advisory Annuity is tax-deferred accumulation at a lower cost than most variable annuities. The secondary reason is the optional return-of-premium death benefit, which adds a layer of guaranteed legacy value without requiring a long surrender commitment. In real-world terms, this is the kind of product a fee-only advisor recommends when a client wants to keep money in a tax-deferred annuity wrapper but does not want to pay high insurance company fees to do it.

I think this annuity is best for a fee-based advisory client who has meaningful qualified or nonqualified assets, already has pension income, Social Security, or other guaranteed income sources in place, and wants incremental tax-deferred growth using institutional fund options. It is also a reasonable fit for someone who wants a death benefit guarantee without paying for a long surrender period.

It is less attractive for someone who is counting on the annuity to deliver guaranteed lifetime income, who needs a product with principal protection features, or who is buying inside a taxable retirement account where the tax-deferral benefit is already covered.

You are buying a tax-deferred wrapper around a collection of institutional mutual funds. Unlike a brokerage account, the wrapper prevents annual taxable events when you move money between subaccounts. Unlike a typical variable annuity, the wrapper here is unusually thin — there are no heavy insurance charges layered on top, and there is no income rider or GLWB in the contract.

The value proposition is simple: if tax deferral is worth something to you, and you want DFA or Vanguard funds inside an annuity structure, this is one of the more cost-efficient ways to get there.

Transamerica Advisory Annuity gives you access to 27 variable subaccounts — 8 from Dimensional Fund Advisors and 19 from Vanguard, including 8 index funds. You can move money among subaccounts at any time without triggering a taxable event. Withdrawals can be taken at any time on or after the issue date, with a $500 minimum, and can be taken from specific subaccounts or pro rata across all.

The base contract death benefit pays the account value at the time of death. That is the Policy Value Death Benefit, and its M&E&A is 0.27%. The optional Return of Premium Death Benefit adds a guarantee that beneficiaries receive at least total premiums paid, adjusted pro rata for any withdrawals taken. That optional rider adds 0.20% to the M&E&A, bringing the total to 0.47%.

Neither death benefit has a step-up or roll-up feature — the ROP benefit is a floor, not a growing guarantee.

The optional Return of Premium Death Benefit is meaningful for the right buyer. It guarantees that even if markets fall between purchase and death, beneficiaries receive at least total premiums paid less adjusted withdrawals. For a client who wants market exposure but wants to make sure a legacy value is preserved for heirs, this rider adds a genuine guarantee at a fairly modest cost — 0.20% on top of the base charge.

The rider is irrevocable once elected and must be chosen at contract issue. Issue ages are limited to 0–75 for this option. The ROP benefit also supports spousal continuation.

This is where Transamerica Advisory Annuity stands out compared with most variable annuities: there are no surrender charges and no surrender period. You can take withdrawals at any time in any amount, subject only to the $500 minimum per withdrawal.

The only meaningful liquidity caveat is federal tax rules. Withdrawals before age 59½ are subject to ordinary income tax plus a potential 10% federal penalty on earnings. That applies to any annuity, not just this one, and is not a product-specific restriction.

For RMD purposes, required distributions can be taken without triggering surrender penalties — because there are none. This makes the contract relatively straightforward to administer inside an IRA.

The base contract charges are M&E&A of 0.17% mortality and expense plus 0.10% administrative, totaling 0.27%, plus subaccount expenses that range from 0.08% to 0.39% depending on selections. The overall expense range is 0.35%–0.66%, which Transamerica compares against an industry average of 2.06% from Morningstar data.

Contracts with account values below $25,000 are subject to a $25 annual service charge. The charge is waived once the policy value, or total premiums minus withdrawals, reaches $25,000. That threshold is low enough that most buyers will avoid it quickly.

There is no base product fee beyond the M&E&A, no rider fee unless you elect the ROP death benefit, and no sales commission structure — this product is sold directly or through fee-based advisors who charge their own advisory fees separately.

The biggest structural tradeoff is the absence of any income or accumulation guarantee. The account value is fully market-exposed. A sustained bear market will reduce contract value, and there is nothing in the contract that provides a floor on accumulated value.

Transamerica Advisory Annuity is issued by Transamerica Life Insurance Company (Cedar Rapids, Iowa) in all states except New York, and by Transamerica Financial Life Insurance Company in New York. Transamerica is part of the Aegon group. Per the Wink product profile, A.M. Best has rated the company A and Standard and Poor's has rated it A+. These ratings reflect the financial strength of the issuing company, not the performance of the subaccounts or the annuity itself.