Our Clear Spring Highlander Annuity Review (Overall)
The Clear Spring Highlander is a fixed indexed annuity that adds an up-front premium bonus to your account and offers an optional lifetime income rider. The bonus gives more of your money an opportunity to earn interest from day one, but early withdrawals can come with a bonus recapture charge.
Highlander has an interesting bonus, but we would approach it with caution. We like the S&P 500 option and the up-front boost to the account. A long surrender period, changing renewal terms, and concerns about Clear Spring make it important to compare other choices before buying.
- Insurance company: Clear Spring Life and Annuity Company
- Product type: Modified single-premium fixed indexed annuity
- Premium bonus: Added to the account value for qualifying first-year deposits; bonus and terms can change
- Income rider: Optional lifetime withdrawal benefit with an additional charge
- Access: One free withdrawal of up to 10% of the account value each year beginning in the second contract year, subject to the contract
- Death benefit: Account value, subject to contract provisions
Clear Spring Highlander Annuity Alternatives
Compare Highlander with the best annuities from other financially strong insurance companies. Fill out the form below or call (770) 755-1565 for a free comparison.
Our Professional Opinion on the Clear Spring Highlander Annuity
We like the idea behind Highlander’s bonus. It is added to the account value, so the bonus itself can help generate interest. That is very different from an income-base bonus that only helps calculate a future paycheck. If you want to take withdrawals and leave more money working for you, a real up-front bonus can be useful.
But we would not buy this annuity just because of the bonus. Your money is generally subject to a ten-year surrender period, a portion of the bonus can be taken back on an early exit, and future caps can change. A bigger starting balance does not guarantee Highlander will grow faster than an annuity with better crediting terms.
Our concern is the company. Clear Spring Life and Annuity Company has an A− (Excellent) financial strength rating from AM Best, which meets our minimum for a long-term annuity. But in July 2026, AM Best changed the outlook from positive to negative after a substantial portion of the group’s private-credit investments was reclassified from unaffiliated to affiliated, reducing its risk-adjusted capital measure and raising financial reporting concerns. The rating itself was affirmed, not downgraded. We do not like the negative outlook, and it gives us pause about a long commitment.
If you want lifetime income, do not let a bonus make the decision for you. Compare the actual guaranteed paycheck at your retirement date. Highlander’s income rider costs extra, and its illustrations may show income based partly on interest the annuity has not earned yet. Compare the income guaranteed at your intended start date with offers from other financially strong insurance companies.
What We Like
- A bonus added to the account: It can earn interest, unlike a bonus that only increases an income calculation.
- S&P 500 crediting option: We prefer an index most people recognize and understand.
- Optional lifetime income: The rider can provide guaranteed lifetime withdrawals under its rules.
- Death benefit: The account value can pass to beneficiaries, including any bonus and credited interest remaining in the account.
- Qualifying health waivers: Nursing home and terminal or critical illness provisions may provide extra access under their rules.
What We Don’t Like
- Clear Spring’s negative outlook: The rating meets our minimum, but the negative outlook and investment reporting concerns give us pause.
- A long commitment: Ten years is a long time to have your money tied to one annuity.
- Bonus recapture: Take too much out early and part of that up-front bonus can be taken back. That stinks if you thought the full bonus was yours to walk away with immediately.
- Caps and participation rates can change: Today’s crediting terms are not necessarily what you will get at renewal.
- The income rider costs extra: The fee reduces your account value, including in years with no index interest.
- Limited access in year one: The ordinary free-withdrawal allowance begins in year two.
How the Highlander Premium Bonus Works
Highlander adds a premium bonus to the account value on qualifying deposits made during the first contract year. That bigger account can then earn interest under the strategy you select. The bonus offered on a new policy and its terms can change.
For example, suppose a $100,000 deposit receives a hypothetical 10% bonus. The account starts at $110,000 before interest or other charges. Unlike an income-base bonus, that additional amount is in the account. But that does not mean you can immediately surrender the annuity and walk away with $110,000. A surrender charge, bonus recapture, and market value adjustment can apply to an early exit.
When comparing bonus annuities, look at the value after the period you plan to hold it, the caps and participation rates along the way, and what you can leave your family. A bonus can provide a head start, but it cannot make up for poor crediting terms forever.
How the Lifetime Income Rider Works
The optional lifetime withdrawal rider can provide an annual income for life without requiring you to annuitize. It has a separate charge deducted from the account value. Eligible withdrawals continue under the rider’s terms even if permitted withdrawals eventually reduce the account value to zero.
The rider uses an income benefit base to calculate the paycheck. That base is a calculation, not an amount you can surrender or leave to your beneficiaries. The premium bonus added to the account value is not the same as a bonus applied to the rider’s benefit base. Do not add them together or assume both bonuses are money you can withdraw.
An illustration can show increasing income or benefit-base growth based on interest assumptions. That is a possibility, not a promise that the index will earn that interest. Ask for the guaranteed income in dollars, and compare the same premium, ages, start date, and single or joint coverage with other insurers. We can prepare a free personalized income heat map to make that comparison.
How Interest Is Credited
Highlander offers a fixed account and index-linked options, including an S&P 500 strategy. You do not own the index or receive its dividends. Depending on the strategy, a cap or participation rate affects how much interest is credited.
A negative index result does not create a negative index interest credit. Your account can still decrease from withdrawals, rider charges, or applicable surrender charges and market value adjustments. Clear Spring can change future crediting terms within the contract’s guarantees, so do not assume the first cap stays in place for the whole commitment.
For accumulation, we like comparing a competitive bonus with a multi-year cap lock. Oceanview CapLock and Sagicor Sage Accumulator are examples of contracts with available cap locks. Compare actual offers and insurer strength before deciding; a locked cap does not guarantee interest.
Withdrawals, Surrender Charges, and Bonus Recapture
Beginning in the second contract year, Highlander generally permits one free withdrawal of up to 10% of the account value each contract year. If you need money in the first year, or more than the free amount later, restrictions and charges can apply. The free-withdrawal feature is helpful, but it does not make the whole account liquid.
An early withdrawal above the available allowance can trigger a surrender charge, premium bonus recapture, and a market value adjustment (MVA), where applicable. An MVA can increase or decrease the payment. These are separate calculations, so ask for the actual surrender value before moving money.
If you need the money in the next few years, this is a lousy place to put it. A premium bonus looks a lot less exciting when you have to give up part of it to get out.
Health Waivers
The contract can waive surrender charges and applicable MVAs for qualifying nursing home confinement or a terminal or critical illness, subject to the requirements. The nursing home provision has waiting, age, and confinement requirements and is not available everywhere. These provisions let you access your own money; they do not create a separate pool of long-term care insurance.
What Happens When You Die?
The death benefit generally equals the account value, including any remaining premium bonus and interest. That is better for your family than assuming an income benefit base can be cashed out at death. Withdrawals and rider charges reduce the account value while you are alive.
If your spouse is the sole primary beneficiary, the contract allows spousal continuation under its terms. Compare that option with taking the death benefit, because the choice can affect how the contract continues.
Pros and Cons Compared With Other Annuities
- Compared with a MYGA: A fixed-rate annuity locks in interest for a set period. Highlander starts with a premium bonus and offers index-linked potential, but future index credits are not guaranteed.
- Compared with other fixed indexed annuities: Highlander’s up-front account bonus is useful. Other products may offer a more attractive bonus, a cap lock, better income, or a stronger company. Compare the whole contract.
- Compared with a RILA: A registered index-linked annuity can expose you to market losses. Highlander does not credit negative index interest, although fees and withdrawals can reduce the account.
- Compared with a variable annuity: A variable annuity offers investment choices that can rise or fall with the market. Highlander limits index-linked interest in exchange for protection against negative index credits.
Who Might Be Attracted to Highlander?
Someone who wants an up-front account bonus, plans to hold the annuity for the long term, and values the option of lifetime income may like Highlander’s design. We understand the appeal. But given the negative outlook, compare the benefits with annuities from insurers with stronger financial ratings and outlooks before deciding.
Who Should Look Elsewhere?
Look elsewhere if you need access to most of your money soon or want a guaranteed fixed return. We would also compare another insurer if you are uncomfortable with Clear Spring’s negative outlook.
What We Recommend
We would be cautious with Highlander. The up-front account bonus is a feature we like, but the negative company outlook and long commitment give us pause. For growth, compare bonus annuities and cap locks from financially stronger insurers. For income, compare the actual guaranteed payments at your retirement date.
Contact The Annuity Expert for a free, no-obligation comparison. Call (770) 755-1565 or use the form below, and we can help you compare the alternatives for growth, income, and the money you want to leave your family.
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