Our Professional Opinion on the Reliance Guarantee Annuity
Reliance Guarantee is one of the better designs in the Reliance fixed annuity lineup. You can access part of your money in the first year, lock your rate for three, five, seven, or ten years, and avoid a new surrender period after the initial guarantee. Those features make it easier to plan around than an annuity that renews into another multiyear commitment.
Reliance Standard Life Insurance Company is a great insurance company. Its A++ (Superior) rating from AM Best is the highest available and exceeds our A− minimum. Its financial strength is a reason to trust the guarantees, but the contract still has to earn our recommendation.
The drawback is that all four terms include a market value adjustment. If you want to withdraw more than the free amount early, the MVA can reduce your proceeds on top of the surrender charge. We would choose a term you can afford to keep, not commit emergency money just to earn a higher rate.
Before buying, compare the same term with other fixed annuity rates from insurers rated A− or higher. We would choose Reliance Guarantee when its guaranteed rate is competitive for your deposit and its MVA and withdrawal rules fit your plans. We would not choose a weaker rate merely because of the company’s excellent rating.
What We Like
- Rate choices: Three-, five-, seven-, and ten-year guarantees let you match the term to your plans.
- First-year access: Up to 10% of the deposit is available without early-withdrawal charges in year one.
- No new surrender period at renewal: After the initial term, the contract renews annually without a new surrender-charge or MVA period.
- Excellent company: Reliance Standard holds an A++ rating from AM Best.
What We Don’t Like
- MVA on every term: A large early withdrawal can receive an adjustment in addition to a surrender charge.
- Longer commitments restrict access: The seven- and ten-year versions are poor places for money you may need in full soon.
- The initial rate ends: The renewal rate can be lower after the original guarantee.
- Care waivers have restrictions: Age and confinement requirements determine whether you qualify.
Reliance Guarantee Annuity Overview
Reliance Guarantee is a single-premium fixed annuity with a choice of three-, five-, seven-, or ten-year interest guarantees. The minimum deposit is $20,000. The maximum issue age is generally 85 for the 3, 5, and 7, and 80 for the 10; availability and rules vary by state.
Key Features
- Interest guarantee: The initial rate is fixed for the term selected.
- Liquidity: Up to 10% of the deposit in year one and 10% of annuity value afterward, subject to contract conditions.
- Early exit: Surrender charges and an MVA can apply to withdrawals above the allowance.
- Renewal: A one-year declared rate after the initial term, without a new surrender-charge or MVA period.
- Nursing care: Qualifying confinement may permit greater access for an eligible annuitant.
- Death benefit: The annuity value is generally payable to beneficiaries before annuitization.
Which Guarantee Period Would We Choose?
Choose the guarantee around when you will need the money. Three years lets you reassess sooner. Five or seven years can be appropriate if you want a longer rate lock. Ten years is worth considering when its guaranteed rate is competitive and you have other money available for emergencies.
We do not automatically dislike a longer MYGA. Unlike an annuity that resets interest annually, a longer MYGA can lock a rate you are satisfied with. But a good rate does not make the ten-year version suitable for money you may need in two years.
Withdrawals and Liquidity
The free-withdrawal allowance is generally up to 10% of the deposit in the first year and 10% of annuity value each year afterward. You can request a qualifying lump sum or arrange payments subject to the contract rules. Withdrawals leave less money earning interest and reduce the amount available for beneficiaries.
If you plan to live on the interest: Compare the payment with an annuity that offers a guaranteed lifetime withdrawal benefit. Use the same deposit, income start date, and single or joint coverage. Interest withdrawals do not guarantee a paycheck for life.
If you want withdrawals without lifetime income: Compare an annuity with a real upfront bonus added to the account. A larger balance might earn more interest dollars and leave more after identical withdrawals, even with a lower rate. Compare the same withdrawal dates, fees, surrender values, and bonus rules.
If your health is poor or you expect a shorter retirement: Compare what your beneficiaries would actually receive from an annuity whose bonus fully vests and is payable on a qualifying death. This annuity pays its applicable death benefit; it does not pay future unearned interest in advance.
Surrender Charges and the MVA
The surrender charge and market value adjustment generally apply to withdrawals above the allowance during the initial term. The MVA can increase or decrease your proceeds. A full early surrender can leave you with less than you deposited. State variations apply.
The standard surrender schedules below apply during the initial guarantee. Some California schedules differ.
| Contract year | 3-year | 5-year | 7-year | 10-year |
|---|---|---|---|---|
| 1 | 8% | 8% | 8% | 8% |
| 2 | 8% | 8% | 8% | 8% |
| 3 | 7% | 7% | 7% | 7% |
| 4 | 0% | 6% | 6% | 6% |
| 5 | 0% | 5% | 5% | 5% |
| 6 | 0% | 0% | 4% | 4% |
| 7 | 0% | 0% | 3% | 3% |
| 8 | 0% | 0% | 0% | 2% |
| 9 | 0% | 0% | 0% | 1% |
| 10 | 0% | 0% | 0% | 0.5% |
| 11+ | 0% | 0% | 0% | 0% |
Ask for the actual surrender value before withdrawing more than allowed. Do not assume the 10% allowance makes the entire account freely available.
Nursing-Facility Waiver
The nursing-facility waiver can permit a qualifying annuitant to withdraw up to 25% of annuity value without early-withdrawal charges. Confinement generally must last 90 consecutive days, and issue-age and state conditions apply. For the three-year option, the annuitant and any joint annuitant must meet the issue-age condition; admission must occur after the first contract year.
This helps you access your own money if you qualify. It is not a substitute for long-term care insurance or readily available savings.
What Happens After the Guarantee?
After the initial term, Reliance Standard renews the annuity for a one-year period at the then-current rate, subject to the guaranteed minimum. The original surrender charges and MVA end; a new multiyear surrender period does not start automatically.
We like that arrangement because you can compare the renewal offer and decide what to do with the money. The original rate does not continue indefinitely.
Death Benefit and Spousal Continuation
Before annuity payments begin, the death benefit is generally the annuity value. Withdrawals reduce what remains for your beneficiaries. An eligible surviving spouse may be able to choose spousal continuation; confirm the contract and beneficiary requirements.
Our Final Verdict on Reliance Guarantee
Reliance Guarantee deserves a serious comparison when its rate is competitive. Its first-year access, choice of terms, and renewal without a new surrender period are meaningful advantages. The MVA is the catch: choose the guarantee period around your actual timeline and keep emergency money elsewhere.
Contact The Annuity Expert for free annuity quotes. We will compare the rates, withdrawal rules, and alternatives for your retirement goals.
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