Our Professional Opinion on the Western United Discovery Plus MYGA
We do not recommend the Western United Discovery Plus MYGA at current rates. Western United Life is rated B++ by AM Best. The only version we would consider is the 3-year contract, and only if it paid substantially more than a comparable MYGA from an A- or better-rated company.
Western United Life is a just OK annuity company. A B++ rating can occasionally be acceptable for a short contract when the additional guaranteed interest is meaningful, but a small rate difference is not worth stepping down in insurer strength.
Discovery Plus is available in 3-, 5-, and 7-year terms. We would not use the 5- or 7-year version because we do not want to lock retirement money with a B++ company for five years or longer.
The 3-year rate also needs to do more than merely match the stronger-rated market. At current rates, Discovery Plus is not paying enough extra to justify the lower rating. We would take the A- or better-rated insurer instead.
The product does have a clean design. It provides penalty-free access to accrued interest or the current-year RMD beginning in the first contract year, has no Market Value Adjustment, pays the full annuity value at death, and does not automatically restart another multi-year surrender period.
The main product drawback is liquidity. Discovery Plus does not provide normal annual access to a percentage of principal. If you need more than interest or an RMD, the withdrawal can be subject to surrender charges.
Bottom line: Discovery Plus is a short-term rate play, and the 3-year rate is not currently high enough to justify using a B++ insurer. Skip the 5- and 7-year versions and compare the 3-year contract with A- or better-rated MYGAs.
Compare Discovery Plus with the current fixed annuity rates before purchasing.
What We Like
- 3-, 5-, and 7-Year Choices: The product includes a short-term option as well as longer guarantees.
- Interest and RMD Access Beginning in Year One: Accrued interest or the current-year required minimum distribution can generally be withdrawn without normal surrender charges.
- No Market Value Adjustment: Early withdrawals are not further affected by changes in market interest rates.
- Full Annuity-Value Death Benefit: Beneficiaries receive the annuity value without normal surrender charges.
- No Automatic Multi-Year Re-Lock: The owner is not silently placed into another long surrender period after the original term.
What We Don’t Like
- B++ AM Best Rating: Western United Life is below our normal A- minimum.
- The Current 3-Year Rate Is Not High Enough: It does not provide enough additional interest to justify the lower-rated insurer.
- We Would Not Use the 5- or 7-Year Terms: Those guarantees require too long a commitment for a B++ company.
- Limited Principal Liquidity: Normal penalty-free access is limited to accrued interest or the applicable RMD.
- No Health-Related Waivers: The contract does not provide nursing-home or terminal-illness access.
Product Summary
The Discovery Plus MYGA, issued by Western United Life Insurance Company (a member of the ManhattanLife group), is a single premium, multi-year guaranteed annuity designed for fixed, predictable growth. Available in 3-, 5-, or 7-year terms, it offers simple accumulation with tax deferral, no fees, and basic liquidity features. However, it lacks income riders or advanced withdrawal strategies, making it less effective for long-term income planning. This product is best for safe, short- or medium-term accumulation goals using non-qualified funds or IRA rollovers—but not for lifetime income.
Product Type
- Annuity Type: MYGA (Multi-Year Guaranteed Annuity)
- Issuer: Western United Life Insurance Company (ManhattanLife group)
- AM Best Rating: Not disclosed in brochure; typically B++ to A- range—compare with A-rated alternatives
- Use Case: Safe accumulation for a fixed term, tax-deferred growth
- Income Option: Annuitization only (no GLWB rider available)
Funding Options
This annuity can be funded with:
- Qualified Funds: Traditional IRA, Roth IRA, SEP IRA, SIMPLE IRA
- Non-Qualified Funds: Savings, brokerage transfers, CD proceeds, trust assets
Key Features and Terms
| Term | Issue Ages | Surrender Period | Withdrawal Charge Schedule | Minimum Premium | Max Premium |
|---|---|---|---|---|---|
| 3 Years | 0–99 | 3 Years | 6%, 5%, 4% | $10,000 | $1,000,000 |
| 5 Years | 0–84 | 5 Years | 8%, 7%, 6%, 5%, 4% | $10,000 | $1,000,000 |
| 7 Years | 0–84 | 7 Years | 8%, 7%, 6%, 5%, 4%, 3%, 2% | $10,000 | $1,000,000 |
- Interest: Fixed for the initial term; redetermined annually thereafter if renewed.
- Minimum Guaranteed Rate: 1.00%
- Penalty-Free Withdrawals: Accrued interest or current-year RMDs allowed beginning in Year 1.
- Death Benefit: Full contract value paid with no surrender charges or penalties.
Liquidity and Waivers
| Feature | Available? | Details |
|---|---|---|
| Penalty-Free Withdrawals | Yes | Accrued interest or RMDs only |
| Full Withdrawal | Yes | Subject to surrender charges unless exceptions apply |
| Death Benefit | Yes | Full accumulated value paid directly to beneficiaries; probate avoided |
| Emergency Waivers | No | No confinement or terminal illness waivers disclosed |
Unlike other MYGAs, Discovery Plus does not offer optional liquidity enhancements such as 10% free withdrawals or health waivers. For clients who may need access to more than RMDs or interest, this is a significant limitation.
What Happens After the Term Ends?
At the end of the 3-, 5-, or 7-year guarantee period, you will be offered a renewal interest rate for the next contract year. Your options include:
- Withdraw the Full Value: You may withdraw all funds without penalty at the end of the surrender period. If you are under age 59½, the IRS may impose a 10% early withdrawal penalty unless you qualify for an exception.
- Renew at New Rate: The insurer may offer a renewal rate for an additional one-year term. These renewal rates are not guaranteed and may be lower than initial rates.
- Transfer to a New Annuity: Consider using a 1035 exchange to transfer funds into a new MYGA or an FIA with lifetime income benefits.
- Annuitize the Contract: You may convert your contract to a stream of income, but this is irrevocable and not recommended unless no other option fits your situation.
Always review your renewal options carefully, as many insurers offer less competitive rates post-maturity.
Why Comparing Annuity Products Matters
Even among MYGAs, rates, liquidity options, and insurer strength can vary widely. Some MYGAs offer:
- Higher interest rates for the same term. Compare MYGA rates by term.
- Waivers for long-term care, terminal illness, or confinement
- 10% free annual withdrawals without reducing the credited rate
- More favorable surrender schedules or better renewal policies
Don’t buy a MYGA based solely on brand recognition. Work with a broker who can shop all A-rated carriers and present the top-yielding products based on your financial goals.
Pros and Cons
| Pros | Cons |
|---|---|
| No setup or administrative fees | No income rider (GLWB) available |
| Fixed interest, tax-deferred growth | Limited liquidity (interest or RMDs only) |
| Full death benefit avoids probate | Surrender charges for 3–7 years |
| Accepts qualified and non-qualified funds | No health-based waiver options |
| Renewal rates after the initial term may drop | Renewal rates after initial term may drop |
Who Should Consider Discovery Plus?
Good Fit For:
- Individuals seeking predictable, safe growth with no market risk
- IRA rollovers or CD alternatives with tax-deferred growth
- Retirees with short- to mid-term savings goals who do not need income
Not a Fit For:
- Retirees seeking guaranteed income for life—there’s no GLWB
- People who may need access to principal beyond interest or RMDs
- Those under 59½ without a penalty-free exception
Final Verdict
We recommend skipping Discovery Plus at current rates and using an A- or better-rated MYGA. If the 3-year rate becomes substantially higher than the stronger-rated market, it can be reevaluated. Contact The Annuity Expert for free quotes and a no-obligation comparison.
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