Our Professional Opinion on the Brighthouse Fixed Rate Annuity
We recommend the Brighthouse Fixed Rate Annuity when its guaranteed rate is competitive with other A- or better-rated MYGAs. Brighthouse remains A-rated by AM Best and meets our minimum standard, although the rating is currently under review with negative implications and should be rechecked before purchase.
The product offers three-, five-, and seven-year guarantee periods. We are in a high-interest-rate environment, so the five- or seven-year version can be a good choice when you can leave the money untouched and want to reduce the risk of reinvesting later at lower rates.
Brighthouse has better liquidity than many MYGAs. The contract generally permits penalty-free access beginning in the first contract year, allows contract-specific RMDs, and offers a monthly interest-income program that can be stopped and restarted.
We also like the optional Principal Guarantee Rider. It can prevent a full withdrawal from falling below the adjusted original premium. However, the rider is not free. Brighthouse lowers the guaranteed interest rate when the rider is selected.
We would compare the contract both with and without the rider. Someone who intends to hold the MYGA through the full guarantee period may be giving up interest for protection they are unlikely to use. Someone concerned about needing a full early exit may find the lower rate worthwhile.
Another good feature is that the contract automatically moves into one-year renewal periods without new withdrawal charges after the initial guarantee period. That is better than a MYGA that automatically restarts a full multi-year surrender schedule.
The downside is that renewal rates will generally be lower than the initial guaranteed rate, so the contract still needs to be reviewed when the original term ends. The current rating review also needs to be monitored.
Our bottom line: Brighthouse is a good MYGA when its rate is competitive, especially for someone who values first-year liquidity or optional return-of-premium protection. The five- and seven-year terms can be attractive right now, but compare the rate reduction before adding the Principal Guarantee Rider.
Compare Brighthouse with the current fixed annuity rates before selecting a term or adding the rider.
What We Like
- A AM Best Rating: Brighthouse currently exceeds our A- minimum standard.
- Three-, Five-, and Seven-Year Terms: Buyers can choose flexibility or a longer rate lock.
- First-Year Liquidity: The contract generally provides penalty-free access beginning in the first contract year.
- Optional Principal Guarantee Rider: The rider can protect the adjusted original premium on a full withdrawal.
- Monthly Interest-Income Program: Interest can be distributed monthly without a separate program fee, subject to the free-withdrawal limit.
- No New Withdrawal Charges After the Initial Term: The contract moves into one-year renewal periods without restarting the original surrender schedule.
- Health-Related Waivers: Nursing-home and terminal-illness provisions can provide additional access.
- Full Account-Value Death Benefit: Beneficiaries receive the applicable account or minimum withdrawal value without normal withdrawal charges.
What We Don’t Like
- Rating Under Review: The A rating remains acceptable, but the negative review status should be checked before purchase.
- The Principal Guarantee Rider Lowers the Rate: Return-of-premium protection is paid for through reduced interest.
- Lower Renewal Rates: The one-year rates after the initial term will generally be lower than the original guaranteed rate.
- No Reason to Overpay for Protection: The rider may be unnecessary for someone who can hold the contract through maturity.
- The Rate Still Has to Win: Strong features do not justify accepting a materially lower guaranteed rate.
Product Overview
The Brighthouse Fixed Rate Annuity is a multi-year guaranteed annuity (MYGA) issued by Brighthouse Life Insurance Company. It’s designed to offer tax-deferred growth and principal protection, with terms of 3, 5, or 7 years. The product guarantees a fixed interest rate during the initial term and renews automatically into a 1-year period at then-current rates. It includes standard liquidity provisions, optional return of premium, and optional income features.
You can fund this annuity with:
- Nonqualified money (taxable brokerage or savings)
- Traditional IRA or Roth IRA rollovers
- Inherited IRAs (as long as RMD rules are followed)
Before buying this annuity, it’s important to understand the carrier. Read our full breakdown of Brighthouse Financial ratings and reliability
How the Brighthouse Fixed Rate Annuity Works
You contribute a single premium and lock in a guaranteed interest rate for 3, 5, or 7 years. After this term, the contract renews annually unless you elect to take withdrawals, annuitize, or complete a 1035 exchange. Interest compounds tax-deferred. After the initial period, withdrawals are penalty-free.
You can access 10% of your purchase payment in year one, and 10% of the account value on each subsequent anniversary without penalty.
Disclaimer: After the applicable surrender-charge period ends, withdrawals generally are no longer subject to the contract’s surrender charge. Taxable gains remain subject to ordinary income tax, and the taxable portion of a withdrawal before age 59½ may be subject to a 10% additional federal tax unless an exception applies.
Key Features
- Initial Rate Guarantee Period: Choose 3, 5, or 7 years. Each guarantees a fixed interest rate for the selected term.
- Renewal Structure: After the term ends, it renews into a 1-year guarantee period at a new fixed rate (subject to market conditions).
- Free Withdrawal Privileges:
- 10% penalty-free withdrawal in year 1 (of purchase premium)
- 10% of account value on each contract anniversary afterward
- Waivers:
- Terminal Illness: Diagnosed with a life expectancy of 12 months or less
- Nursing Home: 90+ days of confinement
- RMDs: Required distributions from qualified plans are penalty-free
- Principal Guarantee Rider (Optional): Ensures that even if withdrawal charges apply, you can recover your original principal upon full withdrawal, minus prior withdrawals and taxes. This comes with a lower credited interest rate.
- Annuitization Options: Income can be taken for life or a set period, starting no earlier than 13 months after purchase and must begin before age 95.
What Happens After the Term Ends?
Once your selected term ends:
- You can fully withdraw your funds without surrender charges.
- You can renew into a 1-year term with a new fixed rate.
- You may move your funds to another annuity via a 1035 exchange.
- You may annuitize for lifetime or period-certain income.
- If you do nothing, the contract renews automatically with a 1-year guaranteed rate and penalty-free access.
Important: Renewal rates are not guaranteed and may be lower. Always compare current market options.
Pros and Cons
Pros
- High-rated insurer (Brighthouse is A-rated by AM Best)
- Tax-deferred interest accumulation
- Simple structure with predictable returns
- Optional return of premium for principal protection
- Nursing home and terminal illness waivers
- RMD-friendly for qualified funds
- Clear income options for retirees
Cons
- Renewal rates are likely lower than initial rates
- No market participation or inflation hedge
- Return of premium lowers the initial interest rate
- No lifetime income rider or GLWB
- Surrender charges may apply for early withdrawals beyond allowed limits
- Annuitization is irrevocable and not recommended unless necessary
Who Should Consider This Annuity?
Ideal for:
- Conservative savers seeking predictable, tax-deferred interest
- Retirees needing RMD-compliant growth
- IRA rollover investors who don’t want market risk
- Individuals who need short- to medium-term safe money alternatives
Not ideal for:
- Investors under age 59½ without clear deferral intentions (subject to IRS penalties)
- Anyone needing high liquidity or inflation-adjusted growth
- Those looking for guaranteed lifetime income without annuitization (no GLWB)
Other Insurance to Consider
- Fixed Indexed Annuities: Offer principal protection with potential for higher returns tied to market indexes and GLWB options.
- Long-Term Care Annuities: Provide coverage for LTC events and may qualify for tax advantages.
- Life Insurance: A death benefit to replace income or preserve wealth, especially useful if annuitizing the contract and losing liquidity.
Why Comparing Annuity Products Matters
MYGAs vary significantly in rate, liquidity, and post-term options. Some offer stronger rates with no optional riders. Others include GLWBs or inflation protection. Only a broker can compare:
- Current best-in-class MYGA rates
- Indexed annuities with income benefits
- Creditor protection, liquidity options, and company strength
Let us help you identify the best product based on your retirement goals.
What We Recommend
We recommend Brighthouse when the guaranteed rate is competitive, and its first-year liquidity or optional Principal Guarantee Rider solves a specific need. Contact The Annuity Expert for free quotes and a no-obligation comparison of the contract with and without the rider, along with current MYGAs from A- or better-rated insurers.
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