Our Professional Opinion on the Royal Neighbors MYGA
Royal Neighbors is a good insurance company, but we do not love the renewal structure of its MYGA. The product can be considered when its rate is competitive, but we generally prefer a conventional MYGA with one clearly defined surrender period.
Royal Neighbors is a good annuity company. It is rated A by AM Best and comfortably meets our financial-strength standard.
The product offers 3-, 5-, and 10-year guarantee periods, but those labels can be misleading if you assume the contract becomes fully liquid when the first term ends.
Each version is designed with two back-to-back guarantee periods of the same length. The 3-year version can keep you in surrender charges for six years, the 5-year version for ten years, and the 10-year version for as long as twenty years if you miss the penalty-free windows.
The rate for the second guarantee period is not known when you buy the contract. You receive a short window at the end of the first period to leave without surrender charges or a Market Value Adjustment. If you do nothing, the surrender schedule starts over.
That renewal design is the main reason this would not be our first MYGA choice. A consumer may believe they are buying a 3-year annuity when the practical commitment can become six years.
One feature we do like is the no-cost Member Emergency Access Rider. After the first contract year, it can allow a one-time withdrawal of up to half of the account value after certain serious events, including job loss, hospitalization, the death of an immediate family member, or the loss of a home or business from a qualifying disaster.
Bottom line: Royal Neighbors is financially strong, but the MYGA’s repeating surrender periods make it unnecessarily easy to become locked in longer than expected. We would use it only when the rate is competitive enough to justify that structure and the buyer is prepared to act during each maturity window.
Compare the Royal Neighbors MYGA with current fixed annuity rates and simpler MYGAs before purchasing.
What We Like
- A-Rated Insurance Company: Royal Neighbors comfortably meets our financial-strength standard.
- 3-, 5-, and 10-Year Initial Terms: Buyers can choose among short, intermediate, and long initial rate guarantees.
- No-Cost Emergency Access Rider: A qualifying emergency can provide a one-time withdrawal of up to 50% without surrender charges or an MVA.
- Penalty-Free Windows: The owner has an opportunity to leave at the end of each applicable guarantee period.
- Tax-Deferred Fixed Growth: The contract provides a guaranteed rate without stock-market exposure.
What We Don’t Like
- Repeating Surrender Periods: The 3-, 5-, and 10-year versions can effectively become 6-, 10-, and 20-year commitments.
- Second-Period Rate Is Unknown: You do not know today what rate will apply during the second guarantee period.
- Short Maturity Window: Missing the window restarts the surrender-charge schedule.
- Limited Normal Liquidity: The emergency rider is useful, but it is not the same as having a standard 10% annual withdrawal provision.
- Market Value Adjustment: Early withdrawals outside the available window can be further affected by interest-rate changes.
Overview
The Royal Neighbors of America Multi-Year Guarantee Annuity (MYGA) is a fixed, tax-deferred annuity offering guaranteed growth for two back-to-back interest rate periods of equal length—3, 5, or 10 years. This structure gives the annuity a unique design not commonly found in other MYGAs. Issued by Royal Neighbors of America, a fraternal benefit society founded in 1895, the product is backed by an insurer not rated by AM Best but known for its long-standing presence.
- The MYGA is best suited for accumulation goals—not income—because it does not offer a guaranteed lifetime withdrawal benefit (GLWB).
- It does, however, feature an emergency access rider, providing up to 50% liquidity under qualifying events, a rare and valuable benefit in MYGAs.
Product Type
- Annuity Type: Multi-Year Guaranteed Annuity (MYGA)
- Issuer: Royal Neighbors of America (Fraternal Benefit Society)
- Best Use: Long-term accumulation, CD alternative, emergency liquidity access
- Income Option: Annuitization only (no GLWB)
Funding Options
- Non-qualified funds
- Qualified funds: Traditional IRA, Roth IRA, SEP, 401(k) rollover
- 1035 exchanges from existing annuities
Key Features
- Two Guaranteed Rate Periods: Equal-length back-to-back guarantees (e.g., 5+5 years)
- Emergency Access Rider: One-time withdrawal of up to 50% if specific hardships occur (see below)
- Surrender Charges: Apply during the first 2 rate periods unless waived; final 30 days of each period is penalty-free
- MVA (Market Value Adjustment): Applies to early withdrawals outside the 30-day window or emergency rider
- Full Death Benefit: Paid to beneficiaries without penalty
- Tax Deferral: Earnings are deferred until withdrawal
Emergency Access Rider Details
This no-cost rider allows one-time withdrawal of up to 50% of the account value (not to exceed $250,000) after year one if any of these apply:
- Loss of primary residence or business due to disaster or accident
- Death of an immediate family member
- Involuntary job loss for over 90 days
- Accidental loss of a limb or eye
- Hospitalization of the owner for 5+ days
No surrender charges or MVAs apply if the withdrawal qualifies.
What Happens After the Term Ends?
At the end of the second guaranteed rate period, the contract transitions into a renewal phase:
- A new interest rate is set by Royal Neighbors, but will never be lower than the contract’s minimum guaranteed rate.
- No surrender charges apply after the end of the full dual-term period.
- You may withdraw funds, annuitize, or transfer via 1035 exchange.
- A 30-day window at the end of each rate period allows penalty-free exits.
You must take action in this window to avoid being locked into another multi-year period with surrender charges and rate resets.
Why Comparing Annuity Products Matters
This annuity has some standout features—like the emergency withdrawal rider—but there are trade-offs:
- Fraternal insurer is not rated by AM Best, while others offer A- or better.
- The dual-rate structure means surrender charges extend for twice the term length.
- Many A-rated MYGAs offer higher base rates or income riders.
- Other products include built-in 10% free withdrawals annually, which this lacks outside of emergency events or the 30-day windows.
Only a broker can guide you through the complex trade-offs and help match this annuity’s features to your personal goals and risk tolerance.
Pros and Cons
| Pros | Cons |
|---|---|
| Dual-rate periods lock in long-term growth certainty | Surrender charges extend twice the length of the selected term |
| Emergency Access Rider provides rare flexibility | No annual penalty-free withdrawal (unless under hardship) |
| Unique fraternal benefits and member programs | Not rated by AM Best |
| No-cost rider adds value for hardship situations | No GLWB for lifetime income |
| Full death benefit and tax-deferred growth | Must act during renewal window to avoid re-locking |
Who Should Consider The Royal Neighbors MYGA?
Best for:
- Savers focused on long-term accumulation with minimal liquidity needs
- Individuals who want a unique hardship-access feature for emergencies
- People comfortable working with a fraternal insurer
- Conservative investors not concerned with lifetime income riders
Not ideal for:
- Retirees needing guaranteed lifetime income or flexible payout options
- Investors needing access to 10% of principal annually
- Clients who may forget to act at renewal and get locked into a new surrender period
- Anyone prioritizing an A-rated insurance company
Final Verdict: Is the Royal Neighbors MYGA a good annuity?
It can be. We recommend considering Royal Neighbors only when its rate is competitive enough to justify the repeating surrender structure. Contact The Annuity Expert for free quotes and a no-obligation comparison with simpler MYGAs that provide one clear guarantee period and surrender schedule.
Talk to The Annuity Expert Before You Buy
Before committing to Royal Neighbors’ MYGA, let us show you:
- Better options from A-rated carriers with simpler surrender schedules
- MYGAs offering 10% penalty-free annual withdrawals
- Annuities with income riders and better growth potential
Contact us today for free MYGA quotes and a side-by-side comparison based on your financial goals.
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