Two direct-sale MYGAs with “easier” out

With the drought in CD yields, I have bought MYGAs in the past several months to replace my maturing CDs. During my research, I found two interesting MYGAs which offer an easier (lower cost) way out if you need to gain access to the money early.

Gainbridge

https://Gainbridge.life

The surrender charge of the MYGA sold by Gainbridge in the first year is 3% plus market value adjustment (MVA). This is a lot less than traditional broker sold policies, which have surrender fees in the 8% to 10% range (plus MVA) in the first year. The current rates of the MYGA are

3-yr 2.30%
5-yr 2.75%
7-yr 3.05%

Note that for the 5-yr MYGA with a credit rate of 2.75%, a 3% surrender charge is similar to a 13-month early withdrawal penalty for CDs (with MVA not accounted).

The MYGAs sold by Gainbridge are issued by Guggenheim Life and Annuity Company, rated B++ by A.M. Best.

Canvas

https://CanvasAnnuity.com

According to their website (https://canvasannuity.com/#/product), the Canvas Flex fund lets you “get your initial premium back at anytime”. After clarifying with Canvas, the following is my understanding how it works. In the case when you want to surrender the entire policy early. Canvas will take the accumulated policy value and subtract away the surrender charges. If the resulting amount is less than the initial premium, Canvas will return you the initial premium. If the resulting amount is higher than the initial premium, you will get to keep the higher amount. A simple example will illustrate this

Initial premium $10,000
Accumulated value at date of surrender $10,500
Surrender charge (example, which includes MVA) $950
Resulting amount = $9,550
The resulting amount is less than the initial premium, but you will still get back $10,000.

The current rates of the Flex fund are

3-yr 2.40%
5-yr 3.00%
7-yr 3.10%

Canvas also sells the Future fund which has higher yields compared to the Flex fund. But it does not provide the “initial premium back” provision.

The MYGAs sold by Canvas are issued by Puritan Life Insurance Company of America, rated B++ by A.M. Best.

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