Goldstein Scorecard: B (dated October 4, 2026). See how it is graded.
Brighthouse Shield Level II RILA Review (October 2026): Current Caps, Shield Rates, Fees and Withdrawal Charges
Written & reviewed by Hans Goldstein, EA, Independent Licensed Insurance Producer 路 CA license 4273294 路 NPN 20602398Admitted to practice before the IRS
Facts verified against Brighthouse rate sheets, fact card and prospectus on October 4, 2026 路 Updated
Brighthouse Shield Level II is a registered index-linked annuity (RILA) issued by Brighthouse Life Insurance Company. On the 6-Year Annuity rate sheet effective October 1 to 14, 2026, the S&P 500 1-year cap is 16.00% with a 10% Shield (12.00% with 15%, 9.00% with 25%), and the 6-year 10% Shield option is uncapped. The Shield absorbs only the first 10%, 15% or 25% of an index loss at term end; losses beyond it reduce your value. Withdrawal charges run 6 years (7% down to 3%). AM Best rates the insurer A.
Rating watch (checked October 4, 2026): AM Best rates Brighthouse Life Insurance Company A (Excellent), under review with negative implications since November 10, 2025, as reported in Brighthouse Financial’s Form 10-K filed February 24, 2026 (10-K, ratings section). The same filing shows S&P A and Moody’s A3 on watch, and Fitch A- (stable).
Pending sale: Brighthouse Financial agreed on November 6, 2025 to be acquired by Aquarian Holdings for $70.00 per share. Its Form 10-Q filed August 6, 2026 says closing still needs insurance regulatory approvals in Delaware, New York and Massachusetts, the agreement extends automatically to December 6, 2026 if not closed by September 6, 2026, and the merger is expected to close in 2026 (10-Q for the quarter ended June 30, 2026). No completion filing appears on SEC EDGAR as of October 4, 2026.
What it means: an annuity’s values and any contractual guarantees are backed by the claims-paying ability of Brighthouse Life Insurance Company. If an insurer fails, state guaranty associations cover annuity values up to set limits (in California, 80% of value up to $250,000 per owner per insurer; see California guaranty coverage and guaranty limits by state). A rating action is not a default. It is a reason to keep the amount per insurer within your state’s limit and to read the latest rating before you buy.
Correction: an earlier version of this page said Shield buffers ran "10% to 20%", listed a 6-year surrender schedule of 9/8/7/6/5/4%, approximate June caps of "~15%" and "~12%", and S&P and Fitch ratings of A+ and A. Brighthouse's current documents show Shield Rates of 10%, 15% and 25% (6-Year), a withdrawal charge schedule of 7%, 7%, 6%, 5%, 4%, 3%, then 0%, and Brighthouse's own 10-K lists S&P A and Fitch A-. The June caps were not sourced and are removed; current caps are below.
CD vs MYGA, after tax
What $100,000 earns in 5 years: CD vs MYGA, after tax
Rates used: CD 5.00%, the top nationally available 5-year CD (Bankrate, October 14, 2026); change it to the rate you are offered. MYGA 5.95%, the best A-rated rate we track as of October 13, 2026: Delaware Life Pinnacle Plus 5-year (AM Best A-, negative outlook, 7/31/2026), $100,000 and up, effective October 6, 2026 (Delaware Life rate sheet).
| CD, interest taxed every year | $121,081 |
|---|---|
| MYGA, tax-deferred, before tax | $133,507 |
| MYGA after paying tax on all the interest at withdrawal | $126,136 |
| Tax deferral alone adds about | $674 |
| MYGA ahead of the CD, after tax | $5,055 |
Assumes 22% federal and 0% state income tax, no withdrawals, rates held for the whole term. MYGA interest is taxed as ordinary income when you withdraw it, not as capital gains. Gains taken before age 59 1/2 can owe a 10% IRS penalty, and cashing out early can cost a surrender charge. In an IRA both grow tax-deferred, so the edge there is the rate alone. Bank and credit union deposits are FDIC or NCUA insured up to the limits; a MYGA is backed by the issuing insurer's claims-paying ability and your state's guaranty association up to its limits, not the FDIC. General education, not tax, legal or financial advice.
Current Shield Level II 6-Year rates (effective October 1, 2026)
Rates for new contracts. Each "Shield Option" is a combination of term, index, Shield Rate (the loss Brighthouse absorbs at term end) and crediting type. Multi-year caps apply to the whole term, not per year. These rates apply to the initial term only; at each term end, Brighthouse resets them to its then-current renewal rates, never below the contract minimums.
| Crediting type and term | Shield Rate | S&P 500 | Russell 2000 | MSCI EAFE | Nasdaq-100 |
|---|---|---|---|---|---|
| Cap Rate, 1-year | 10% | 16.00% | 19.00% | 20.00% | 16.00% |
| Cap Rate, 1-year | 15% | 12.00% | 16.00% | 14.00% | 13.50% |
| Cap Rate, 1-year | 25% | 9.00% | 11.25% | 9.00% | 10.00% |
| Cap Rate, 3-year (whole term) | 10% | 75.00% | 70.00% | 130.00% | 50.00% |
| Cap Rate, 3-year (whole term) | 15% | 60.00% | 50.00% | 90.00% | 40.00% |
| Cap Rate, 6-year (whole term) | 10% | Uncapped | 110.00% | 300.00% | 100.00% |
| Cap Rate, 6-year (whole term) | 15% | 110.00% | 80.00% | 200.00% | 80.00% |
| Cap Rate, 6-year (whole term) | 25% | 80.00% | 60.00% | 90.00% | 65.00% |
| Step Rate, 1-year | 10% | 10.00% | 12.00% | 8.50% | 10.25% |
| Step Rate, 2-year | 10% | 16.50% | 21.00% | 16.00% | 18.00% |
| Step Rate Edge, 1-year | 10% | 8.00% | 10.25% | 6.50% | 9.00% |
| Par Rate with 1.25% fee, 6-year (not CA, not NY) | 10% | 121% par, uncapped | 115% par, uncapped | 140% par, uncapped | 105% par, uncapped |
| Fixed Account, 1-year | n/a | 3.50% | |||
Step Rate pays its stated rate if the index is flat or up at term end. Step Rate Edge pays its rate if the index return is at or above the negative Shield Rate (for example, down no more than 10% on a 10% Shield). The Shield Level II 3-Year Annuity, a separate contract, posts lower caps for the same dates: S&P 500 1-year 11.00% with a 10% Shield and 3-year 35.00% with a 10% Shield (3-Year New Contract Rates, eff. 10/01/2026).
Contract basics (6-Year Annuity)
| Feature | What the documents say |
|---|---|
| Issuer | Brighthouse Life Insurance Company (Brighthouse Life Insurance Company of NY in New York), policy form 5-213-1 (07/24) |
| Product type | Single premium deferred index-linked annuity, sold by prospectus. Additional purchase payments are not permitted. |
| Purchase payment | $25,000 minimum (qualified and non-qualified); up to $1 million without prior company approval |
| Issue age | Up to 85 |
| Terms and indices | 1, 2, 3 or 6-year terms on the S&P 500, Russell 2000, MSCI EAFE and Nasdaq-100 (price return indices, so dividends are not included) |
| Shield Rates | 10%, 15% and 25%. Maximum loss at term end from index performance: 90%, 85% and 75%, per the prospectus |
| Withdrawal charges | 6 years: 7%, 7%, 6%, 5%, 4%, 3%, then 0%, on amounts above the free withdrawal amount |
| Free withdrawals | After the first contract year, 10% of account value as of the prior contract anniversary |
| Interim Value (mid-term value) | Withdrawals, surrenders, death benefits or Performance Lock before a term ends use an Interim Value. It does not get the Shield protection or the crediting type, and the prospectus warns it can mean a loss beyond the Shield Rate |
| Annual contract fee | None |
| Shield Option Fee | 1.25% a year, only on Par Rate fee options, deducted each contract anniversary and term end date |
| Contractual minimums | Prospectus: Cap, Step and Edge Rates never below 2%; Par Rate never below 100%. The minimum rates flyer shows minimum caps of 8.00% (6-year terms), 6.00% (3-year) and 2.00% (1-year), not for CA, NY or OR |
| Rate lock | New-money rates held 60 days from the application date if Brighthouse receives the application within 7 days |
| Death benefit | Owners 80 and younger at issue: the greater of account value or the purchase payment reduced proportionally for withdrawals. Owners 81 and older: account value |
| Withdrawal charge waivers | Nursing home (90 days of confinement) and terminal illness, after year 1, issue ages 80 and younger, not in all states |
| Free look | At least 10 days, longer in some states and for replacements; the refund can be the account value after an Interim Value calculation |
How losses work (Hypothetical, 10% Shield, 1-year S&P 500 Cap Rate option, $100,000): if the index is down 6% at term end, Brighthouse absorbs it and you are credited 0%. If it is down 25%, Brighthouse absorbs the first 10% and your option value falls 15%, to $85,000. If it is up 30%, you are credited the 16.00% cap. The Shield applies only on the term end date; money taken out earlier uses the Interim Value.
For comparison, A-rated-or-better insurers were paying about 5.50% to 6.05% on 5-year MYGAs and the best nationally available 5-year CDs about 4.70% to 5.00% APY (MYGAs: public carrier rate sheets, October 14, 2026; CDs: Bankrate and Popular Direct, October 18, 2026). Current rates: MYGA rates.
Financial strength and ownership
Brighthouse Financial's 10-K (filed February 24, 2026) lists Brighthouse Life Insurance Company at A from AM Best, A from S&P, A3 from Moody's and A- from Fitch. It also states that the AM Best, S&P and Moody's ratings were "under review with negative implications" (Watch) at that date, after Brighthouse Financial agreed on November 6, 2025 to be acquired by Aquarian Holdings. The company's Q2 2026 10-Q (filed August 6, 2026) says the merger still needed insurance regulatory approvals in Delaware, New York and Massachusetts and was expected to close in 2026. I could not read AM Best's own site to confirm any rating action after February 2026, so check the current rating before you buy. Any contract promises are backed by the claims-paying ability of Brighthouse Life Insurance Company.
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Goldstein Scorecard (dated October 4, 2026)
| Dimension | Grade | Basis (sourced fact) |
|---|---|---|
| Financial strength | B | AM Best A (Excellent), under review with negative implications per the Brighthouse 10-K filed 2/24/2026, tied to the pending Aquarian acquisition |
| Rate or cap competitiveness | A- | S&P 500 1-year cap 16.00% (10% Shield) and 6-year 10% Shield uncapped, rate sheet eff. 10/01/2026. Not comparable to a MYGA rate because you carry loss risk beyond the Shield |
| Guaranteed floor | B | Contractual minimum caps published: 8.00% (6-year), 6.00% (3-year), 2.00% (1-year), outside CA/NY/OR; prospectus floor 2%. There is no 0% floor on losses beyond the Shield |
| Liquidity | C+ | 6-year withdrawal charges 7/7/6/5/4/3%, 10% free after year 1, and Interim Value adjustments on any money taken before a term ends |
| Costs | B+ | No annual contract fee; no explicit fee on Cap, Step and Edge options; 1.25% Shield Option Fee only on Par Rate options. Price return indices exclude dividends |
| Transparency | A | New contract, renewal and minimum rates posted publicly on Brighthouse rates page, updated about twice a month; full prospectus on SEC EDGAR |
| Complexity (folded in from the old Complexity Index) | C | Four indices, four crediting types, four terms, three Shield Rates, Performance Lock and Interim Value. Many moving parts |
| Guaranteed minimum cap (RILA) | 2.00% (1-year) | 2.00% (1-year), 6.00% (3-year), 8.00% (6-year) Cap Rate options; minimum Step Rate 2.00% (1-year) and 3.00% (2-year), Shield Level II SEC prospectus dated April 20, 2026 (checked October 4, 2026). |
| Overall | B | Strong published caps and transparency; held back by the rating review, a 6-year charge schedule and real loss exposure past the Shield |
How these contract minimums compare across products: guaranteed minimum caps across FIAs (October 2026).
Pros and cons
Pros
- High published caps for the initial term: 16.00% on the 1-year S&P 500 with a 10% Shield, and an uncapped 6-year 10% Shield option (eff. 10/01/2026).
- No annual contract fee, and the Cap, Step and Edge options carry no explicit fee.
- Contractual minimum caps are published (8.00% on 6-year options outside CA, NY and OR), so renewal risk has a stated floor.
- Rates, renewal rates and minimums are public, and the prospectus is on SEC EDGAR.
- Choice of a 25% Shield for buyers who want more downside cushion.
Cons
- Index losses beyond the Shield reduce your value. This is not principal protection.
- Six years of withdrawal charges, starting at 7%.
- Money taken before a term ends uses an Interim Value, which can produce a loss even when the index is up.
- Price return indices exclude dividends, so the index return you are measured against is lower than a total return fund.
- AM Best, S&P and Moody's ratings were under review with negative implications as of the February 2026 10-K, pending the Aquarian acquisition.
Who it's for, and when to look elsewhere
Fits: someone who wants stock index exposure with a defined cushion, can leave the money for the full 6 years, understands that a drop larger than the Shield is a real loss, and wants published caps and minimums to compare against.
Look elsewhere if:
- You mainly want a known rate. A MYGA locks a declared rate for the whole term, backed by the claims-paying ability of the issuing insurer, with no index loss exposure. A-rated-or-better insurers were paying about 5.50% to 6.05% on 5-year MYGAs on October 14, 2026 (public carrier rate sheets). See current MYGA rates.
- You may need more than 10% a year in the first six years, or before a term ends.
- You want no chance of losing principal to index declines. A fixed indexed annuity credits 0% in down years instead of a loss; compare on how crediting works.
- Rating changes tied to the acquisition would worry you. Check the current AM Best rating first.
Questions to ask your agent
- What are the minimum cap, Step Rate and Edge Rate in my contract's Shield Option riders? Please give me the guaranteed minimum for each option I pick, in writing.
- Show me the full withdrawal charge (surrender) schedule by contract year, the free withdrawal amount, and how the Interim Value would have changed my value if I had withdrawn halfway through a term.
- Which Shield Rate and term are you proposing, and what is my maximum loss at term end on that option?
- What renewal caps has Brighthouse posted for contracts reaching term end this month? (Brighthouse publishes renewal rates on its rates page.)
- How are you paid on this contract? Commission comes from the insurer and is built into pricing, not deducted from your premium. Ask the percentage, and whether a longer term or different share class pays you more. See annuity commissions explained.
- Is the Aquarian acquisition closed, and has AM Best changed the rating since February 2026?
From my desk
RILAs are securities, and I do not sell securities products, so I read this one as a reviewer, not a seller. When someone sends me a Shield Level II proposal, the first thing I check is which option the headline cap belongs to. The 16.00% cap is the 1-year, 10% Shield, S&P 500 option. A 25% Shield on the same index is 9.00%. Make sure the cap and the Shield you are quoted belong to the same option.
The number buyers misread most on this product type is the Shield itself. A 10% Shield is not a 10% floor. It means Brighthouse takes the first 10% of the loss and you take the rest. The second most misread item is the Interim Value: the Shield only applies on the term end date, so a mid-term withdrawal can come out lower than you expect.
Against a MYGA, I put it this way: the MYGA gives you one declared rate for the term and no index loss. The RILA gives you a higher possible return in exchange for a real possible loss. If the money is meant to be safe-money savings, I start with the MYGA. If it is long-term equity money you would otherwise hold in an index fund, a RILA with a deep Shield can be a reasonable middle ground. You can model withdrawal charges with the annuity surrender charge calculator and growth with the annuity calculator.
FAQ
Can you lose money in Brighthouse Shield Level II?
Yes. The Shield absorbs only the first 10%, 15% or 25% of an index loss at the end of a term. Any loss beyond that reduces your account value, up to 90%, 85% or 75% of the option. Withdrawals before a term ends use an Interim Value that does not get the Shield protection, and withdrawal charges can also apply.
What are the current Shield Level II caps?
On the 6-Year Annuity rate sheet effective October 1 to 14, 2026, the S&P 500 1-year cap is 16.00% with a 10% Shield, 12.00% with a 15% Shield and 9.00% with a 25% Shield. The 6-year S&P 500 option with a 10% Shield is uncapped. These rates apply to the initial term only.
What is the Shield Level II surrender schedule?
The 6-Year Annuity has withdrawal charges of 7%, 7%, 6%, 5%, 4% and 3% over six contract years, then 0%. After the first contract year you can take 10% of the prior anniversary account value without a withdrawal charge. The 3-Year Annuity charges 6%, 6% and 5%.
Does Brighthouse Shield Level II have fees?
There is no annual contract fee and no explicit fee on the Cap Rate, Step Rate and Step Rate Edge options. The Par Rate options carry a 1.25% annual Shield Option Fee. Withdrawal charges and premium taxes may apply, and the indices are price return, so dividends are not included.
What is the minimum cap on Shield Level II?
The prospectus says Cap, Step and Edge Rates will never be set below 2%. Brighthouse's minimum rates flyer effective April 27, 2026 (not for CA, NY or OR) shows minimum caps of 8.00% on 6-year options, 6.00% on 3-year options and 2.00% on 1-year options. Your contract rider states your exact minimums.
What is Brighthouse Life Insurance Company's AM Best rating?
Brighthouse Financial's 10-K filed February 24, 2026 lists an AM Best financial strength rating of A for Brighthouse Life Insurance Company, under review with negative implications in connection with the pending acquisition by Aquarian Holdings. Confirm the current rating before buying.
Related reviews
- Brighthouse Shield Level II Annuities: terms, Shield Rates and crediting types
- Prudential FlexGuard RILA review
- Equitable Structured Capital Strategies RILA review
- Are annuities FDIC insured?
- Get an annuity second opinion
About Hans Goldstein: Independent licensed insurance producer. CA Insurance License #4273294. NPN #20602398. Reviews MYGA, FIA, SPIA, DIA, RILA and hybrid life and LTC products from public carrier documents. Phone: 213-414-2808. Email: [email protected].
Also see: Symetra Edge Elite Review · Nationwide Defender Annuity Review
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Sources (checked October 4, 2026)
- Brighthouse Financial, Shield Level II 6-Year Annuity New Contract Rates, effective 10/01/2026 through 10/14/2026 (not CA, NY)
- Brighthouse Financial, Shield Level II 6-Year Annuity New Contract Rates, California, effective 10/01/2026 through 10/14/2026
- Brighthouse Financial, Shield Level II 3-Year Annuity New Contract Rates, effective 10/01/2026 through 10/14/2026
- Brighthouse Financial, Shield Level II 6-Year Annuity Minimum Guaranteed Rates, effective 04/27/2026 (not CA, NY, OR)
- Brighthouse Financial, Shield Level II 6-Year Annuity Fact Card and 3-Year Annuity Fact Card, 2026
- Brighthouse Life Insurance Company, Shield Level II 6-Year Annuity prospectus, dated April 27, 2026 (SEC Form 485BPOS)
- Brighthouse Financial, Inc., Form 10-K for 2025, filed February 24, 2026 (financial strength ratings and outlooks)
- Brighthouse Financial, Inc., Form 10-Q for Q2 2026, filed August 6, 2026 (Aquarian merger status)
- Brighthouse Financial, Shield Level Annuities product page and rates page, checked October 4, 2026
Disclosure
This review reflects publicly available product materials and rates as of the date stated above. Annuity rates, caps, participation rates, payout factors, crediting methods, and long-term care benefit structures change frequently, typically monthly. Always confirm current values against the most recent carrier disclosure document and the actual contract before purchasing. This article is general information for educational purposes; it is not a personalized recommendation, solicitation, or offer of any specific product. Hans Goldstein is an independent licensed insurance producer (NPN 20602398) appointed with multiple A-rated carriers across the annuity and long-term care insurance market; the producer's specific appointment status with the carrier discussed in this review may vary, and this review is not an endorsement or representation of carrier appointment. No compensation has been received from any carrier in connection with the publication of this review. Always read the actual contract and consult a licensed advisor before purchasing any annuity or long-term care insurance product. Past index performance does not predict future credited interest. Annuities and hybrid life+LTC policies are long-term contracts with surrender charges; they are not suitable for funds you may need before the end of the surrender period. AM Best ratings and tax treatment are subject to change. Tax discussion of IRC 搂7702B, 搂1035, and the Pension Protection Act of 2006 reflects law as of 2026 and is subject to change.