SmartSelect 5-Year review

Yes, for buyers who understand what they're getting. This is a good MYGA for someone who wants a locked rate for five years, has no need for income features, and values the combination of a strong carrier and practical liquidity provisions. It's less compelling for someone who wants index participation, a shorter commitment, or a product without MVA exposure.

The main reason to consider SmartSelect 5-Year is rate certainty. Unlike a bank CD, the interest grows tax-deferred, which matters for non-qualified money. The 10% free withdrawal being available immediately — rather than delayed until year two as many MYGAs require — is a genuine practical advantage for someone who wants a safety valve without breaking the surrender commitment. The confinement and terminal illness waivers are a meaningful secondary reason for buyers who want some protection against life changing plans unexpectedly.

I think this product fits best for a retiree or near-retiree in their mid-50s to mid-70s who has a defined block of money — often rollover IRA dollars or after-tax savings — they don't expect to need for five years. It's well-suited for someone coming out of a CD who wants more tax efficiency and is comfortable with the insurance contract format. It's a less natural fit for someone who is not sure about a five-year commitment, wants any chance at market-linked upside, or whose primary need is a reliable income stream rather than accumulation.

You're buying a guaranteed interest rate for five years, nothing more and nothing less. Western & Southern promises a specific annual yield for the full contract term, and that rate doesn't change based on markets, Fed decisions, or anything else after the contract is issued. At the end of the five years, you choose a new GRO period (3–7 years) or the contract shifts to annual renewals with no surrender charge and no MVA. The insurance wrapper means your interest compounds tax-deferred rather than getting taxed each year the way bank interest typically is. That deferral benefit is real over five years, especially in higher tax brackets.

SmartSelect 5-Year uses what Western & Southern calls a Guaranteed Rate Option (GRO). At issue, the company credits a fixed rate for the entire five-year term — as of the rate sheet dated May 4, 2026, that was 4.05% annually for deposits below $100,000 and 4.30% for deposits of $100,000 or more. That rate is guaranteed; it won't be reset or changed during the initial period. At maturity, you have the option to roll into another GRO period of 3 to 7 years or move to a one-year renewal period. The renewal period has no surrender charge and no MVA, which gives you real flexibility at the end of the initial term without forcing a decision under pressure. The tiered rate break at $100,000 is meaningful — 25 basis points of difference compounds over five years in a way that makes the deposit size worth considering when comparing options.

The waivers are the secondary feature worth paying attention to here. A Nursing Home / Confinement Waiver allows penalty-free withdrawals after the first contract anniversary if you've been confined 60 or more consecutive days. A Terminal Illness / Limited Life Expectancy Waiver applies if you're diagnosed with 12 months or fewer to live — this waiver is not available in California. These aren't exotic riders; they come with the base contract. For a product you're locking up for five years, having those exit valves embedded at no extra cost adds real practical value, particularly for buyers in their late 60s or 70s who face a longer statistical probability of a health event during the contract term.

The surrender schedule here is front-loaded: 7%, 7%, 7%, 6%, 5% across the five contract years. That 7% charge in year one is meaningful — it means someone who changes their mind early faces a significant exit cost. The MVA (Market Value Adjustment) compounds the issue: if you need to surrender when prevailing interest rates are higher than when you bought, the MVA will be negative and will increase your effective exit penalty. MVA adjustments can go both ways — they can work in your favor if rates have dropped — but buyers should understand this is a real risk, not just a theoretical one.

The 10% free withdrawal being available from day one is a genuine positive. Many MYGAs delay free access until year two; here you can pull up to 10% of account value per contract year without charge or MVA from the start, subject to a $250 minimum per withdrawal. RMDs also receive favorable treatment: required minimum distributions are not subject to surrender charges or MVA, which matters for IRA money. Even with those provisions, anyone who thinks they might need more than 10% of this money within five years should think hard before committing.

The base contract has no annual fee. There are no rider fees because there are no riders. The cost of owning this product is entirely structural: the rate the company offers reflects its cost of capital and the insurance wrapper, and early exits trigger surrender charges plus potential MVA. For a pure accumulation MYGA with no income features to pay for, that's a reasonable cost structure — you're not paying for features you don't use.

The trade is giving up liquidity and flexibility for a locked rate. If interest rates rise materially after you buy, you're stuck at the older rate and face an MVA penalty if you want to leave. If rates drop, you benefit from the lock but face no exit pressure. That asymmetry is the core risk of any MYGA, and SmartSelect 5-Year is no different.

Legal Entity: Western-Southern Life Assurance Company

Parent: Western & Southern Financial Group

A.M. Best Rating: A+