Renewal Rate Integrity — Grading Carriers on the Bait-and-Switch
Written & reviewed by Hans Goldstein, Independent Licensed Insurance Producer · NPN 20602398Independently reviewed & last updated 2026-06-09
Quick take: When your MYGA's initial guarantee period ends, the carrier offers a "renewal rate." That rate is almost always LOWER than the new-money rate they're offering to fresh buyers. Some carriers are transparent and renew close to market; others slash renewals expecting you won't shop. Below: my A-to-F Renewal Integrity grades for every carrier I review + how to defeat the bait-and-switch with §1035 exchanges.
How the carrier bait-and-switch works
Most carriers segment buyers into TWO POOLS at renewal:
New money pool (you get this when you first buy)
- Headline rate — designed to attract you
- 5.85% on a 5-year MYGA, for example
Renewal pool (after initial guarantee ends)
- Lower rate — they assume you won't shop around at maturity
- Typically 50-150 bps below new-money
- So your 5.85% MYGA renews at 4.85% even though new buyers get 5.85%
The spread is the carrier's profit. They keep your money at the LOWER rate while attracting new buyers at the HIGHER rate.
How to defeat the bait-and-switch
At maturity, you have a 30-day window (typically) to decide. Three good options:
- §1035 exchange to a different carrier's NEW MYGA at current new-money rate — TAX-FREE
- Surrender within the 30-day window for cash + reinvest where rates are best
- Negotiate with the existing carrier — some will match new-money rate if you call and threaten to leave
All three put you back in the "new money pool" — at the existing carrier or a new one.
Renewal Integrity grades — my A-to-F system
Tier S (best) — Transparent, predictable renewals close to new-money
Wichita National Security — A+
- Publishes renewal rates publicly on their website
- Historical pattern: renewals within 50 bps of new-money
- B+ rating but excellent renewal behavior
Tier A — Mostly transparent, renewals reasonable
Aspida WealthLock — A
- Apollo-backed, fairly competitive renewals
- Generally within 75 bps of new-money
- A- carrier rating
Penn Mutual — A
- A+ mutual carrier
- Conservative but consistent renewal behavior
MassMutual Stable Voyage — A
- A+ mutual structure
- Renewals near new-money historically
Oxford Multi-Select — A
- A AM Best rating
- Strong renewal track record
Tier B — Variable history, sometimes drops 100+ bps
Delaware Life Pinnacle — B
- Group 1001 parent (private credit heavy)
- Renewals can drop 100-150 bps from new-money
- Worth shopping aggressively at maturity
Athene MaxRate — B
- A+ Apollo-backed
- Renewal behavior varies; recent years have been competitive
- Worth verifying at maturity
North American Liberty — B+
- A+ Sammons mutual
- Generally reasonable but cohort-dependent
Tier C — Renewals often drop sharply
EquiTrust SPIA/MYGA — C
- B++ AM Best
- Renewal rates historically drop 150+ bps from new-money
- Strongly recommend §1035 exchange at maturity
Sentinel Personal Choice — C
- B++ AM Best
- Renewals can be punitive; NAIC complaint index elevated
- §1035 exchange essentially mandatory
Tier D — Avoid the renewal entirely
Old captive-distributed carriers (Bankers Life legacy contracts, etc.)
- Some legacy contracts renew at 1-2% on 5%+ initial guarantees
- The age of the contract matters — older = worse renewal
- Always §1035 exchange OUT
Why some carriers maintain integrity
Carriers in Tier S/A typically share these traits:
- Mutual ownership — no shareholder pressure to maximize spread
- Limited distribution channels — fewer competing for the new-money pool
- Track record concerns — they want repeat business + word-of-mouth
- Conservative balance sheet — they don't NEED the spread
Carriers in Tier C/D typically:
- Aggressive growth + private equity ownership — pressure to maximize spread
- Volume distribution — assume churn at renewal
- Newer brands — building book before reputation
How to research renewal history
Direct from carrier
Some carriers publish renewal rate cohorts publicly (Wichita, MassMutual, Penn Mutual). Look at their websites.
From your agent
Ask your agent: "What's the renewal history for this carrier's 5-year MYGAs from 2018-2020?" Honest agents have this data.
From NAIC
NAIC consumer database tracks complaint volume — higher complaints often correlate with worse renewal practices.
From state insurance department
Some state insurance departments publish carrier rate filings publicly. Read the renewal rate sections.
The 5-year ladder strategy
The right way to handle renewal risk: build maturity dates into your strategy from Day 1.
Buy 5-year MYGAs at staggered intervals so something matures every 1-2 years. At each maturity:
- Survey current market rates
- If renewal beats new-money offers: stay (rare)
- If new-money beats renewal: §1035 to a different carrier OR surrender + redeploy
This is built-in flexibility against the bait-and-switch.
Hans's renewal recommendations
If your current MYGA matures in:
0-12 months:
- Get current new-money rate quotes from 3-4 carriers
- Calculate the §1035 exchange break-even (surrender charges + new lockup)
- Decide: stay, exchange, or surrender + redeploy
12-36 months:
- Note your maturity date
- Monitor your carrier's renewal rate transparency
- Build a maturity calendar across all your MYGAs
3+ years:
- Build awareness now, defer action
- Use the time to research carrier renewal histories
What to do
Don't let your MYGA quietly renew at a bait-and-switched rate. At every maturity, demand new-money pricing or move on.
📞 213-414-2808 for a §1035 exchange analysis at your MYGA maturity. Hans pulls 3-4 carrier quotes + analyzes whether the exchange beats staying. No charge.
Related reading
- Why 5-Year MYGAs Win — laddering strategy
- 1035 Exchange Step-by-Step — tax-free transfer mechanics
- Top MYGA Rates June 2026 — current market
- Annuity Quote Comparison Checklist — apples-to-apples shopping
🧮 Goldstein Complexity Index
A core part of every Goldstein review. The more complex an annuity, the worse the rating in this dimension — because complexity is where buyers get burned (confusing riders, fee structures hidden in plain sight, surrender penalties that surprise people, separate "benefit bases" they thought were cash). Simple products (SPIAs, MYGAs) score low; products with stacked bonuses + income riders + MVA + multiple crediting strategies score high.
This product's score: 8/100 — Grade A+ (Transparent)
Easy to understand. Few moving parts. The buyer can fully explain the product to a friend after one read of the contract.
Score breakdown
| Dimension | Score (1–10) | What this measures |
|---|---|---|
| Riders | 1/10 | Number of optional/required riders (income, death benefit, LTC, etc.). More riders = more fees + more confusion. |
| Crediting strategies | 1/10 | Number of index-linked strategies (cap, spread, participation rate, step rate, volatility-controlled indices). More options = harder to understand. |
| Surrender complexity | 1/10 | Length of surrender period + MVA + bonus recapture interaction. Longer + MVA + recapture = more confusion. |
| Benefit-base separation | 1/10 | If the product has a separate "PIV" or income-base that is NOT cash but feels like cash. This is the single biggest source of buyer confusion in the industry. |
| Bonus structure | 1/10 | Premium bonus with recapture schedule. The bonus is real, but the recapture is complex. |
How to read this
- A+/A (0–40): You can understand what you bought. Pure accumulation FIA, MYGA, or SPIA. Low risk of mis-selling.
- B (41–60): You need to read the contract carefully and have a second-opinion review before signing. Income riders add the most confusion.
- C (61–80): Many buyers don't fully understand what they own. Common mis-selling: "bonus" sold as cash, "benefit base" sold as account value, surrender charges undisclosed.
- D (81–100): Demands an independent producer second opinion before signing. The product may still be right for you — but the chance you'll later say "I didn't know it worked that way" is very high.
Why complexity matters more than people think: Carriers don't get sued for complexity. Agents don't get sued for it either (in most states). But buyers regret it constantly. The annuity that wins your money in year one and confuses you for the next 14 is worse than a simpler product that you understood perfectly. Simple ≠ inferior. Simple = audit-able.
⏳ Renewal rate risk — why FIA caps work like HYSA rates (NOT mortgage rates)
This is the #1 thing buyers misunderstand about fixed indexed annuities, and the single biggest source of "I didn't know it worked that way" regret after year 3.
The mortgage-rate mental model is wrong
When you take out a 30-year fixed mortgage at 6.5%, that rate is locked for the entire term. The bank can't raise it. That's how most buyers assume an FIA cap rate works.
It's not. FIA cap rates work like high-yield savings account rates.
When Marcus or Ally raises their HYSA rate from 4.0% to 4.5%, that's their choice — and they can drop it back to 4.0% the next month. The rate you saw when you opened the account is NOT the rate you keep forever. The bank can change it at any time.
FIA cap rates work the same way:
- The cap you see at purchase applies to the first crediting period only (typically year 1).
- At each anniversary, the carrier can reset the cap within the contractual minimum.
- If interest rates fall or the carrier's option budget tightens, your cap can drop dramatically — sometimes from 9% down to 3-4% over a few years.
Why caps change: the option-budget mechanics
Carriers don't print money to pay your index-linked credit. They take your premium, invest most of it in bonds at prevailing interest rates, and use the bond yield to buy S&P 500 call options that generate the index credit.
- Rates UP → bond yields rise → more option budget → higher caps possible
- Rates DOWN → bond yields fall → less option budget → caps get cut
The 2010-2021 low-rate environment crushed FIA caps across the entire industry. The 2022-2025 rate cycle restored them. Whatever cap you see today is a function of TODAY's interest rate environment — and that environment will change.
The minimum cap floor (the only real guarantee)
Every FIA contract has a minimum guaranteed cap stated in the contract. This is the LOWEST the cap can ever go. Common minimum caps:
- Some contracts: 1% minimum cap (essentially nothing)
- Better contracts: 2-3% minimum cap
- Top-tier products: 4%+ minimum cap
Read the minimum cap before signing. If it's 1%, your worst-case scenario is essentially 0% real returns for 10+ years.
How to evaluate a carrier's renewal practices BEFORE buying
The single best protection: ask the agent for the carrier's in-force renewal-rate history for the product you're being quoted. A carrier that's maintained competitive caps on existing contracts over 5+ years is much more trustworthy than one with no history (or worse, a history of cap cuts).
Carriers with the most consistent in-force renewal track records (industry consensus as of 2026): Athene, Allianz, Sammons (North American/Midland), American Equity, and Nationwide. These carriers have published renewal-rate histories that survive scrutiny.
Carriers without published renewal-rate histories OR with a history of cutting caps post-sale should be evaluated carefully — especially if the cap they're showing you today is near the top of the market.
The single most important questions to ask
- "What's the minimum guaranteed cap in this contract?"
- "Can you show me this product's in-force renewal-rate history for the last 5 years?"
- "What's the current cap on in-force contracts purchased in 2020, 2018, and 2015?"
- "If the cap drops to the minimum, what's my realistic annual credited return?"
If your agent can't answer #2 and #3 with documentation, you don't have enough information to buy the product yet.
Explain it like I'm 12 — quick summary
Annuities are insurance contracts that exchange a premium (lump sum or installments) for one of three benefit structures:
- Lifetime income (SPIA — pay once, get monthly checks for life)
- Tax-deferred growth with downside protection (FIA — market-linked credits with caps + 0% floor)
- Fixed rate over a term (MYGA — like a CD on steroids)
The carrier funds these benefits through bond portfolio yields + (for FIAs) option budgets used to buy market-linked credits.
The trade-off across all annuity products: certainty in exchange for liquidity and growth potential. SPIA = max certainty (income guaranteed for life) at cost of principal access. FIA = downside protection at cost of growth ceiling. MYGA = rate certainty at cost of term lock-up.
Quick FAQ
Q: Are annuities ever "good investments"?
A: Yes — when used for the specific purpose of income certainty, downside protection, or rate certainty. Bad when forced into a hybrid agenda (e.g., SPIA sold for "growth").
Q: What's the difference between immediate and deferred annuities?
A: Immediate (SPIA) = income starts within 12 months of purchase. Deferred = income or accumulation over years before payouts begin.
Q: Who regulates annuities?
A: State insurance commissioners. (RILAs are also FINRA-regulated as securities.)
Q: What's the state guaranty fund limit?
A: Typically $250,000-$300,000 per owner per carrier (varies by state). Split large purchases across multiple carriers to stay within coverage on each half.
Q: How do I compare annuities side-by-side?
A: Look at: carrier rating (AM Best, S&P, Moody's, Fitch, Weiss, KBRA composite), Goldstein Complexity Index, renewal-rate integrity, customer service, and the specific structure for YOUR use case.
Q: When should I get a second opinion?
A: Before signing any annuity over $50,000. Independent review costs nothing and can save thousands.
📩 Get a second opinion before you sign — this is a big decision
Talk to a licensed independent expert. Hans.
Fixed indexed annuities are committed for 7-15 years. Cap rates renew annually and can drop. Income riders have separate benefit bases that aren't cash. Get an independent review before you commit your retirement savings to a multi-year contract.
Drop your info — within 24 hours, you'll get a written independent review of your quote, side-by-side comparisons vs. 2 alternatives, and a no-pressure 15-minute call if you want one.
📞 Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer appointed with multiple A-rated carriers
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Disclosure
This review reflects publicly available product materials and approximate 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 §7702B, §1035, and the Pension Protection Act of 2006 reflects law as of 2026 and is subject to change.