Transamerica Variable Annuity I-Share II review

Yes, for the right buyer. This is a solid no-load variable annuity for someone who wants broad investment access inside a tax-deferred wrapper without committing to a surrender schedule. It is less appealing for someone who primarily needs guaranteed lifetime income, because the I-Share format is built for advisors who charge a fee directly rather than for buyers who want a simple income-generating product. Adding a rider is possible, but the combined costs deserve close attention.

The main reason to buy the I-Share II is tax-deferred growth across a wide subaccount menu without the constraint of a surrender period. This is the type of annuity a fee-based financial advisor would recommend for a client who wants an annuity wrapper but does not need or want to lock up money for years. The secondary reason is flexibility — the ability to add an income rider later, upgrade the death benefit, or reallocate freely among subaccounts as the client's situation changes.

I think the I-Share II works best for someone working with a fee-only or fee-based advisor who wants market exposure and tax deferral without paying a commission-embedded surrender charge. It fits a moderately sophisticated buyer who understands that total annuity costs include both the base contract fee and the underlying subaccount expenses. It is less suitable for someone shopping primarily for the lowest possible annual cost (a plain brokerage account or low-cost index fund would beat it on fees alone) or for someone who wants a fully guaranteed income stream as the product's primary function.

You are buying a tax-deferred investment account that happens to be structured as a variable annuity. Unlike a fixed or fixed indexed annuity, there is no principal protection here — the account value fluctuates directly with the subaccounts chosen, and principal loss is possible. The value proposition is not protection; it is tax deferral, the option to add a lifetime income floor through a rider, a death benefit baseline, and access to a curated subaccount menu under an insurance wrapper.

The I-Share II gives policyholders access to 78 variable subaccounts covering equity, fixed income, sector, asset allocation, and managed-risk strategies from well-known fund managers including BlackRock, American Funds, Fidelity, Vanguard, Goldman Sachs, and J.P. Morgan. The base contract also includes four fixed account options. Policyholders can allocate, reallocate, and rebalance among subaccounts with twelve free transfers per year.

The base M&E&A fee is 0.20% annually, which is low relative to most traditional B-share or L-share variable annuities. But the net subaccount expense ratios — ranging from 0.13% for Vanguard index options to 1.59% for TA Goldman Sachs 70/30 — are the more material cost driver. A buyer allocating to Vanguard options might run total base annual costs near 0.35%. A buyer in actively managed subaccounts could easily exceed 1.80% before any rider fee.

The optional income riders are a meaningful secondary feature for buyers who may want guaranteed income in the future but are not ready to commit to a strict allocation today. Both the Transamerica Income Edge 1.2 (a guaranteed lifetime withdrawal benefit) and the Transamerica Principal Optimizer (which adds a guaranteed minimum accumulation benefit alongside a lifetime withdrawal benefit) can be added at issue or on a policy anniversary. The flexibility to add a rider later — rather than buying a separate income-focused product — is a genuine option worth noting.

That said, the income rider fees are not trivial. Income Edge 1.2 costs 1.45% (single life) or 1.55% (joint life) annually on the withdrawal base, with a maximum cap of 2.50%. When stacked on top of the base M&E&A and subaccount expenses, a buyer electing the Income Edge rider could realistically be paying 2.50% or more in total annual costs. That changes the math considerably compared to the bare-bones I-Share base.

This is one of the clearest strengths of the I-Share II. There are no surrender charges. Policy value can be accessed at any time without a withdrawal penalty at the contract level. Withdrawals from fixed accounts may be subject to an excess interest adjustment depending on rates at the time of withdrawal, but there is no traditional declining surrender charge schedule tied to the variable subaccounts.

The minimum withdrawal amount is $500. Systematic withdrawals are available monthly, quarterly, semiannually, or annually. If a living benefit rider is in force, excess withdrawals — those above the rider's allowed annual amount — can reduce the withdrawal base on a greater of dollar-for-dollar or pro rata basis, so buyers with riders still need to manage withdrawals carefully.

The fee structure has several layers worth understanding clearly:

Base M&E&A: 0.20% annually on subaccount policy value. This is low.

Annual service charge: $35 per year, waived if policy value or net premiums paid reach $100,000.

Subaccount expenses: 0.13% to 1.59% depending on funds selected. This is where most of the annual cost lives for the typical buyer.

Optional death benefit riders: Return of Premium adds 0.30% on account value; Annual Step-Up adds 0.60% on account value (available only to age 75, step-ups stop at age 81).

Optional income riders: Income Edge 1.2 costs 1.45% single / 1.55% joint on the withdrawal base. Principal Optimizer costs 1.35% on the greater of withdrawal base or guaranteed future value. Both can increase to a maximum of 2.50%.

A buyer who adds neither a death benefit upgrade nor an income rider will have very low base costs relative to most variable annuities. A buyer who stacks an enhanced death benefit and a lifetime income rider should do the full cost arithmetic before purchasing.

The I-Share II is issued by Transamerica Life Insurance Company, based in Cedar Rapids, Iowa. Transamerica is a subsidiary of Aegon, a large global insurance and financial services group. Transamerica carries an A.M. Best rating of A and a Standard and Poor's rating of A+, per the Wink product data as of November 2025. The company has broad national distribution and a substantial variable annuity book of business.